| Q: |
What is the
Community Home Buyers program? |
| A: |
The
Community Home Buyers loan program is sponsored by the Federal National
Mortgage Association, commonly referred to as Fannie Mae, and
administered through participating direct lenders.
Fannie Mae's Community Home Buyers program has an income cap of 120
percent of the area's median income. In addition, the borrower must
attend a seminar on home ownership and the home buying process.
It is not geared only for first-time home buyers, unlike many of the
other low-down -payment programs on the market.
This loan program allows for 97 percent financing. The borrower may
put down as little as 3 percent of his or her own money, with the
remaining 2 percent coming in the form of a family gift or loan from a
government or nonprofit agency.
For more information, call Fannie Mae at (800)732-6643.
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| Q: |
How can
Fannie Mae help a home buyer? |
| A: |
Fannie
Mae's Community Home Buyers Program allows first-time buyers with little
cash to obtain 95 percent financing. Participants may put down as little
as 3 percent of their own money, with the remainder permitted in the
form of a gift from family members, a government program or nonprofit
agency. Mortgage insurance is required on all loans above 80 percent
loan-to-value ratio when borrowers do not use their own funds for at
least 5 percent down.
The program is administered through participating lenders. There are
income limits in different states. However, the income restriction is
waived when borrowers participate in the Fannie Neighbors program.
Fannie Neighbors also has lower income requirements for borrowers who
want to buy in designated central cities.
People who are borrowing in either of these programs must attend a
seminar on home ownership and the home buying process.
For a list of participating lenders, call Fannie Mae at (800)
732-6643.
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| Q: |
Who is
Fannie Mae? |
| A: |
Fannie
Mae is a congressionally chartered secondary-mortgage market company
that buys loans from private lenders. Because the firm is so big and has
been involved in purchasing packages of loans from lenders for 25 years,
it has enormous influence on the mortgage market. For more information,
call Fannie Mae at (800) 732-6643. |
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| Q: |
Are there
Fannie Mae programs for inner cities? |
| A: |
Home
buyers in urban neighborhoods can take advantage of the secondary
mortgage market institution's Fannie Neighbors Program.
This mortgage plan was created to increase homeownership and promote
revitalization in central cities as well as minority low and moderate
income areas. Borrowers need less income to qualify for a mortgage and
less cash for closing than with standard mortgages. The program includes
mortgages to buy or refinance a home.
Fannie Neighbors has no income limit for residents who are purchasing
a home within designated central cities (if not the largest city in a
metropolitan area, cities must have populations of 250,000 or more.)
Borrowers must attend a seminar on home ownership and the home buying
process. For a list of participating lenders, call Fannie Mae at (800)
732-6643.
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| Q: |
What is
Fannie Mae's low-down program? |
| A: |
Fannie
Mae is expanding the availability of low-down-payment loans in an effort
to help more people nationwide qualify for a mortgage.
Two new programs will help potential buyers overcome two of the most
common obstacles to home ownership, low savings and a modest income.
To address many first-time buyers' struggles to save the down
payment, Fannie Mae developed Fannie 97. The program provides 97 percent
financing on a fixed-rate mortgage with either a 25- or 30-year loan
term through Fannie Mae's Community Home Buyers Program.
Fannie Mae's new Start-Up Mortgage will assist buyers with a 5
percent down payment who are at any income level. Yet applicants do not
need as much income to qualify and less cash for closing than with
traditional mortgages. Borrowers will receive a 30-year, fixed-rate
mortgage with a first-year monthly payment that is lower than the
standard fixed-rate loan.
Freddie Mac, Fannie Mae's counterpart, also offers low-down-payment
loan programs.
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