|
Many lenders participate in the Community Home Buyer's Program, sponsored by Fannie Mae, which is specifically tailored for the first-time homebuyer. This type of loan provides financing for low-to moderate-income buyers who might not qualify for a loan on traditional criteria. Under this loan program, you do not need to have a credit history and it allows you to show a willingness to pay by presenting paid utility bills, payments to a landlord, and other sources of credit or services.
An important feature of the Community Home Buyer's Program is the 3/2 option. This means that you can buy a home with only 3% down of your own funds, instead of the usual 5%, and the reaming 2% can be a gift from relatives or borrowed from friends. Other loan requirements, such as your income-to-debt ratios, are relaxed under this program and you are not required to have a specific percentage of the purchase price in reserve or checking account as required for a conventional loan.
The disadvantage of this program is that there are limits on the amount of the loan you may apply for. To qualify for a loan, you must earn no more than the area median income (with exceptions for specified high-cost areas). You may want to check with your local bank to see if it offers this loan program and what the loan limits are for your area.
Copyright © 2004 Sandy Gadow This column may not be resold, reprinted, resyndicated, or redistributed without the written permission of Escrow Publishing Company.
http://www.escrowhelp.com/articles/20041205.html |
