Fannie Mae and Freddie Mac re-introduced a very low down payment purchase home loan program in California at 3% down to buy a home to compete with the FHA home loan program at 3.5% down payment.
Fannie Mae’s DU update to 9.2 was released over the weekend of December 16th. As part of their underwriting enhancements, Conventional Financing is now available up to 97% on purchase home loan programs in California.
The Conventional Product Matrix has been updated. See highlights below.
– Increase in Purchase Loan to Value to 97%
– Standard Purchase when at least one borrower is a first-time home buyer.
– Occupancy One Unit Principal Residence only, no units
– Eligible Borrower at least one borrower must be a first-time home buyer (have not owned any properties in the past 3 years).
– Ineligible Product Types High Balance and Adjustable Rate Mortgages
– Ineligible Property Types Manufactured Homes
– Underwriting is not allowed, has to pass the Desk Top Underwriting System with an Approved/Eligible and reviewed by an underwriter
– Minimum Borrower Contribution requirements apply
– Reserves Determined by DU and Gifts are eligible
With the limited funds that most homebuyers have at their disposal today, this 97% loan to value purchase program in California is perfect. On a $300,000 purchase price that is $9,000 down, which can come from checking, savings, Retirement account, gift funds, IRS tax returns. If you have the verifiable income and credit scores for this program, we can always find money for the down payment.
This very loan down payment home loan program to buy a house in California will assist with homeownership for many more buyers because of the minimum required down of 3% of the purchase price. This is a fix rate term program giving the home buyer the security that the principle and interest payment will not adjust through the term of the loan.
With the FHA home loan program mortgage insurance remains through out the life of the loan with any FHA case numbers issued after June 3rd 2013, this is another alternative loan program to make homeownership obtainable for those home buyers with limited funds. Let’s explore your loan options to purchase a home in the coming months that will fit your lifestyle and monthly budget.
by Nathan Rufty