Low Cost Loan Sources
Fannie Mae's suite of Community Lending mortgage products and options is designed to help borrowers overcome the two primary barriers to home ownership: lack of down payment funds and qualifying income.
In most cases, face-to-face home-buyer education is required. Generally, a borrower is eligible if the household income is no more than 100 percent of the median income in the area where the home is located.
Fannie Mae offers three Community Lending products that are 15- to 30-year, fixed-rate mortgage loans that allow 38 percent of the borrower's monthly income to be targeted for housing costs and other debts, such as credit cards or student loans, and allow up to 33 percent of the borrower's gross monthly income to be used for housing costs (principal, interest, taxes, and insurance).
Fannie Mae's Community Home Buyer's Program SM offers underwriting flexibilities that include a 5 percent down payment and no cash reserves at closing.
Fannie 3/2SM is similar to Fannie Mae's Community Home Buyer's Program, but requires fewer funds directly from the borrower. This 15- to 30-year, fixed-rate mortgage also requires a 5 percent down payment, but only 3 percent of it must come directly from the borrower's own funds. The remaining 2 percent can come from a relative; federal, state, or local government agency; employer; or nonprofit organization.
Fannie 97® is for the home buyer who has enough income to handle monthly mortgage payments but is experiencing difficulty accumulating cash for the down payment. It only requires a 3 percent down payment from the borrower's own funds, and the borrower only needs to have one month's mortgage payment in cash savings or reserves after closing.
Special Mortgage Options:
Four special mortgage options can be combined with the three Community Lending mortgage products to create a mortgage that is tailored more specifically to a borrower's home-buying needs.
FannieNeighbors® is a nationwide, neighborhood-based mortgage option designed to increase homeownership and revitalization in areas designated as underserved by HUD, in low- to moderate-income or minority census tracts, or in central cities.
Community Seconds® is a second lien mortgage that can be combined with one of Fannie Mae's Community Lending mortgage products to increase affordability. This mortgage option is typically provided by a federal, state, or local government agency; an employer; or a nonprofit organization. It may be forgivable, offer deferred payment, or other special terms.
Community Land Trust is an option that nonprofit organizations can use to provide and preserve long-term affordable housing for low- and moderate-income families. Typically, a nonprofit organization acquires and holds land for the benefit of a community. The community land trust retains title to the land but sells the homes under long-term ground leases to low- and moderate-income families at affordable ground rents. A lender originates a first leasehold mortgage loan using one of Fannie Mae's three basic Community Lending mortgages, and Fannie Mae purchases the leasehold mortgage from an approved lender.
Lease-Purchase is an option that nonprofit organizations can use to help borrowers who have successfully managed their credit obligations in the past but have insufficient savings for a down payment. With Lease-Purchase, nonprofit organizations can purchase homes that can be leased with an option to buy. Part of the rent payment is saved for the purpose of accumulating the down payment and closing costs. The mortgage may then be assumed by the borrower from the nonprofit at a later time, usually three to five years after the initial lease date.
If you are a professional in the mortgage or housing fields interested in conducting business with Fannie Mae, please visit our business-to-business Web site, www.eFannieMae.com, for additional information.
If you're a home buyer or current homeowner, Fannie Mae has developed a large array of innovative mortgage products available to you through a nationwide network of approved lenders listed in Fannie Mae's For Home Buyers & Homeowners section. Use our Find a Mortgage feature in the For Home Buyers & Homeowners section to locate a lender in your area offering the mortgage product that best suits your needs. The Fannie Mae-approved lender you select can work with you to help find a low-cost mortgage that meets your needs.
Fannie Mae: Low and No Down Payment mortgages to meet the needs of borrowers.
http://www.efanniemae.com/hcd/single_family/mortgage_products/low_downpayment.html
Fannie Mae: MyCommunityMortgage TM
Fannie Mae's MyCommunityMortgage TM is a suite of flexible mortgage options for low- and moderate-income borrowers of one- to four-family homes.
http://www.efanniemae.com/hcd/single_family/mortgage_products/my_comm_mortgage.html
Community Solutions:
For teachers, police officers, firefighters, and healthcare workers
http://www.efanniemae.com/hcd/single_family/mortgage_products/comm_solutions.html
Fannie Neighbors: (15- to 30-year, fixed-rate mortgage loans)
38 percent of the borrower's monthly income can be used for housing costs/other debts.
http://www.efanniemae.com/hcd/single_family/mortgage_products/low_downpayment.html#Neighbors
Fannie Mae: Flexible 100 and Flexible 97:
both allow a no-down payment option for borrowers with minimal funds for a down payment.
http://www.efanniemae.com/singlefamily/mortgage_products/low_mortgages/low_mortgages.jhtml
FHA Special Programs:
http://www.gomortgagesonline.com/fha_programs.cfm
Freddie Mac: Low Cost Mortgage Money
www.freddiemac.com/corporate/about/dream/ making_homeownership_possible.htm
Department of California Veteran Affairs: Cal Vet Loans:
http://www.cdva.ca.gov/calvet/sellmore.asp
First Time Home Buyers Program: No Down Payment
http://mortgage-calculators.org/programs/programs.html
Down Payment Assistance Program:
http://www.buyers-assistance.com/resources/lenders.html
Wells Fargo Low and No Down Payment Programs:
http://www.wellsfargo.com/per/mortgage/purchasing/no_low.jhtml