"Our priority is a safe, responsible balance between expanded access to mortgage financing and the long-term viability of today’s mortgage loans—limiting risk to lenders, investors, homeowners, and taxpayers," Fannie Mae said. "Our goal is straightforward: to work with lenders to make mortgages more accessible, affordable, and sustainable."
The HomeReady mortgage program, boasts a new feature for lenders designed to automatically identify eligible loans through Fannie Mae's Desktop Underwriter. In addition, the program will utilize the GSE's suite of risk management tools for greater certainty and efficiency. HomeReady reflects extensive research and lender input, and will replace Fannie Mae’s MyCommunityMortgage.
“HomeReady will help qualified borrowers access the benefits of homeownership with competitive pricing and sustainable monthly payments,” said Jonathan Lawless, VP for Underwriting and Pricing Analytics at Fannie Mae.
Fannie Mae's HomeReady Goals:
Accessible: Helping creditworthy homebuyers qualify for a mortgage
Affordable: Limiting the up-front and monthly costs of mortgages
Sustainable: Supporting the long-term success of homebuyers
Fannie Mae also announced that for the first time, it will accept and consider income from a non-borrower household member to determine an appropriate debt-to-income ratio for the loan. The GSE believes that this will help multi-generational and extended households qualify for an affordable mortgage.
According to Fannie Mae research, these extended households usually have as stable or more stable incomes than other household at similar income levels.
First-time and repeat homebuyers can purchase a home using HomeReady with a down payment of as little as 3 percent, the announcement said.
The program requires all borrowers to complete Framework, an online education course that will prepare them for the home buying process and provide additional support for maintaining homeownership.
“We are also confident this mortgage option will create business opportunities for lenders serving the changing demographics and borrower needs seen in today’s market. The combination of our risk management safeguards and an innovative online education tool will put HomeReady borrowers in a strong position to succeed in homeownership.”
Fannie Mae will begin accepting loan deliveries for HomeReady in late 2015.