Fannie Mae has bestowed an early holiday present to those who wish to become home owners. Their new HomeReady™ Program released in mid-December is designed to remove many of the restrictions that have previously been imposed upon those who were trying to purchase in today’s real estate market. This program is poised to make a big impact with those who did not think they could purchase a home or refinance their present homes. How will HomeReady™ make such a big impact?
First, the biggest obstacle to purchase a home is coming up with the cash necessary to fund the transaction. With today’s skyrocketing rents, it is hard to save up several thousands of dollars. However, HomeReady™ is now lessening the cash required:
- Low down payment.
With a low 3.0% down payment required, the cash requirement is lessened significantly. On a $300,000 purchase, a 3.0% down payment is less than $10,000. That is much less than the cost of a late model used car. - Gifts allowed.
Fannie Mae is allowing all the cash required to fund the transaction to come from a gift from an immediate family member. When parents help their children purchase a home, they are providing them with the most significant financial assistance possible because in the long run, owners have an average net worth of over ten times that of renters, according to studies published by the Federal Reserve Board. - Help with closing costs.
Fannie Mae permits lenders and sellers to pay most or all of the required closings costs, further reducing the cash needed to get to closing. It should be noted that these solutions could raise the price of the home or rate on the mortgage slightly.
