FHA – Alternative Mortgage Options
Borrowers looking for an alternative to the FHA loan program can now consider a new loan option from FannieMae and FreddieMac.
FreddieMac offers the Home Possible Advantage loan program
FannieMae offers the Home Ready loan program
Details on these programs are below:
Both Home Ready (FannieMae) and Home Possible Advantage (FreddieMac) are loan programs for borrowers that want an alternative to FHA with little money down.
- Less down payment (3%)
- Assistance with closing costs by utilizing a seller concession up to 3%. (Note: If a borrower puts at least 10% down, a 6% seller concession is allowed.)
- The Home Ready program has a less stringent appraisal than an FHA.
- This program has income limits.
- First time homebuyers will be required to complete an informational course online.
- Look for anything that can be considered unsafe.
- Make sure all utilities are functioning. Plumbing, heating, hot water, sinks, toilets.
- Make sure the house has a stove. A refrigerator is not necessary at the time of inspection
- If the house is winterized, it must be de-winterized before the appraiser inspects it. The utilities must be turned on and tested to confirm habitability.
- Is there mold in the basement?
- If you observe what appears to be a new deck, ask if it has a “certificate of occupancy”. It will be a problem and could postpone a closing a month.
- If you observe what appears to be a finished basement, ask if it has a “certificate of occupancy”. It will be a problem and could postpone the closing a month or more.
- If a property has a “shared well”, ask if there is a maintenance agreement and obtain it
- If a property is on a private road, ask if there is a maintenance agreement and obtain it
- Verify the property and school taxes. If inaccurate taxes are submitted, it will cause the “debt to income ratio” to be wrong and could cause a declination of the loan. The ratio could exceed the maximum limit.
- A client must be at least 4 years from a bankruptcy to be eligible
- A client must be at least 4 years from a foreclosure or deed in lieu of foreclosure.
For additional specific information about this program
contact a Windsor Realty Professional
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