FNMA replaced MyCommunity with HomeReady which offers a lower MI payment and a reduction of fees to lower income buyers. This effort is to compete with FHA. Below is a short comparison between the two programs.
MI - Mortgage Insurance
LTV - Loan To Value
DPA - Down Payment Assistance
First Time Homebuyer - Not on title in previous 3 years
Per Bank - Use Bank guidelines
| Guideline | FHA | FNMA HomeReady | Comments |
Max LTV |
96.5% |
97% |
|
MI Payment on $100,000 sales price |
$67.81 |
$95.50 |
FHA finances partial MI up front. FNMA payment depends on MI company used. MGIC was used as an example. |
% Equity to drop MI Payment |
NA |
20% |
FHA requires MI indefinitely |
Up Front Funding Fee |
Yes |
No |
FHA - 1.75% up front |
Income Restrictions |
No |
Yes |
FNMA No restriction in low income area |
Non-Occupy Co-Borrower |
Allowed |
Allowed |
FNMA Restrictions on income to qualify |
Own Other Properties |
Yes |
No |
|
Ownership Counseling |
No |
Yes |
|
Max DTI |
Per Bank |
50% |
|
1st Time Home Buyer only |
No |
No |
|
Allow Gift/Grant for DPA |
Yes |
Yes |
|
Credit Score causes Increase in Points/Rate |
Per Bank |
Yes |
FNMA Increase in Points if score below 680 |
Income used from inside dwelling |
No |
Yes |
FNMA allows income from a rented room/basement inside home (usually used for refinances) |
LTV for multiplex |
96.5% |
See Comment |
FNMA 1 – 97%; 2 – 85%; 3-4 units 75% max LTV |
Renovation Loan available |
Yes |
Yes |
FHA – 203k FNMA Homestyle Renovation |
County Lending Limits |
Yes |
No |
|
Buy Downs Permitted |
Yes |
Yes |
Allows to buy down the interest rate |
Minimum Credit Score |
Per Bank |
620 |
|
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