Down Payment Assistance Programs

Transcription

1 Down Payment Assistance Programs Schedule an Appointment 6 8 hour Homebuyers Education Course 2-hour Pre-Purchase Counseling The Homeowners Employment Corporation 2440 Wall Street, SE Suite B-2 Conyers, GA

2 A Summary of Down Payment Programs currently available in the State of Georgia: PROGRAM Down Payment Assistance up to: DeKalb County First Time Homebuyer Program $8,000 Federal Home Loan Bank (FHLB) First Time Buyer $5,000 Federal Home Loan Bank (FHLB) Community Partners Product $7,500 Federal Home Loan Bank (FHLB) Foreclosure Recovery Product $15,000 Federal Home Loan Bank (FHLB) Veterans & Returning Veterans Product $10,000 Federal Home Loan Bank (FHLB) Veterans Rehabilitation Product $15,000 GA Dream - Standard $5,000 GA Dream PEN (Protectors, Educators, and Healthcare workers) $7,500 GA Dream CHOICE (disabled household member(s)) $7,500 GA Dream Hardest Hit Fund (first come-first served basis) $15,000 Gwinnett County HOMESTRETCH $7,500 Invest Atlanta 20Plus Invest Atlanta HFA Preferred Invest Atlanta HOME Atlanta % of purchase price 5% of purchase price 5% of purchase price Invest Atlanta Atlanta Affordable Homeownership Program (AAHOP) $20,000 Invest Atlanta Vine City Renaissance Initiative $10,000 National Homebuyers Fund (NHF) 5% of purchase price Neighborhood Stabilization Program (NSP) $25,000 USDA Loans WE DeKalb $0 Down Payment 5% of purchase price Revised 1/2018 Page 1

3 PORTFOLIO LENDING: Make sure to ask your Lender if they have their own first-time Homebuyers Program that can be paired with any of the Down Payment Assistance Programs listed above. Remember: You must choose a lender that is a preferred lender of the DPA program that interests you in order to receive the assistance. DEKALB COUNTY FIRST-TIME HOMEBUYER $8,000 DPA FIRST TIME HOME BUYERS Visit for the most up to date information. The DeKalb County Human and Community Development Department (DCHCDD) is committed to assisting in the creation of affordable housing for low and moderate-income households throughout DeKalb County. The First Time Homebuyer s Program provides funds to assist homebuyers with costs associated with the purchase of a home in DeKalb County. The form of assistance used for the down payment assistance program will be HOME funds in the form of deferred payment loans. Down Payment Assistance will be provided to eligible recipients in an amount not to exceed $8,000. Funds will be secured against the property as a zero percent (0%) interest deferred loan for five (5) years. In the sixth (6) year repayment requirements of down payment assistance funds will be forgiven. How can DeKalb assist you? Eligible applicants with credit scores of 620 or above can receive up to $8,000 toward their down payment and closing cost (amount needed to close only). Eligible applicants with credit scores less than 620 can receive up to $5,000 to assist with down payment and closing cost (amount needed to close only). Who is eligible? First-time homebuyers that have not owned a home during the last three years are eligible. Successful applicants must meet maximum income guidelines and be credit-worthy. What about the home? Single-family detached home in DeKalb County, outside the city limits of Atlanta. Homes must meet all DeKalb County codes at the time of purchase. No Condos or Townhomes. The maximum purchase price of the home cannot exceed $160, Annual Income Limits Household of $39,050 Household of $44,600 Household of $50,200 Household of $55,750 Household of $60,250 Household of $64,700 Household of $69,150 Household of $73,600 Revised 1/2018 Page 2

4 FEDERAL HOME LOAN BANK (FHLB) $5,000 DPA FIRST TIME HOME BUYERS FHLB is a grant and is forgiven after 5 years. It can also be used anywhere in GA and is an in-house program within the Federal Home Loan Bank and not a government program. Buyer s minimum contribution is $1, FHLB program will match buyer s contribution 4-to-1 up to $5, Funds can be used for down payment, closing costs and or pre-paids Program is for first time home buyers or if you have not owned a home in 3 years Buyer must occupy the home for 5 years, after 5 years the total amount is forgiven Money is interest free, and every year you remain in the home, 20% of the down payment is forgiven Earnest money and upfront appraisal fees count toward home buyer contribution Available for homes listed for resale and new construction No additional underwriting or extra time to process Income guidelines are considered (see chart below) Homebuyer Education is not required, but recommended. ADDITIONAL DOWN PAYMENT PROGRAMS: COMMUNITY PARTNERS PRODUCT: Provides up to $7,500 in down-payment and closing-cost funding to current or retired law enforcement officers, educators, health care workers, firefighters, and other first responders that are first-time homebuyers or non-first-time homebuyers. FORECLOSURE RECOVERY PRODUCT: Provides up to $15,000 in down-payment and closing-cost funding for the purchase or purchase and rehabilitation of an existing home from the Real Estate Owned (REO) inventory of an FHLBank Atlanta member financial institution. The funding is available to first-time or non-first-time homebuyers. VETERANS & RETURNING VETERANS PURCHASE PRODUCT: Provides up to $10,000 in funding for a home purchase by veterans or active duty members of the U.S. military or their surviving spouses. Veterans Products are available nationwide through FHLBank Atlanta members. VETERANS & RETURNING VETERANS REHABILITATION PRODUCTS: Provides up to $15,000 for energy efficient and accessibility improvements to a home owned by veterans or active duty members of the U.S. military or their surviving spouses. Veterans Products are available nationwide through FHLBank Atlanta members. GA DREAM $5,000 - $15,000* FIRST TIME HOME BUYERS DPA PROGRAM. The GA Dream Down Payment Assistance Programs allows for buyer to have a higher income limit and its program ranges from $5,000 to $7,500 for down payment. The $7,500 is for people who serve the public such as police, firemen, military and medical employees to name a few. This loan has to be paid back when you sell or refinance the home (with the exception of the GA Dream HHF Program): Buyer s minimum contribution is $1, Revised 1/2018 Page 3

5 Provide a Certificate of Complete for both the individual pre-purchase counseling and homebuyer education workshop. Funds can be used for down payment, closing costs and/or pre-paids Income limits do apply, see below: 1) One or two person household: Maximum income is $69,000 2) Three or more person household: Maximum income is $79,500 Program is for first time home buyers or if you have not owned a home in 3 years in metro Atlanta Money is interest free, but must be paid back if you sell or refinance Only available for primary residence purchase transactions Protectors, Educators and Health Care Workers may qualify for $7,500 assistance Must meet mortgage loan requirements Sales price cannot exceed 250,000 within the Atlanta Metropolitan Area (*)The new GA Dream program the HHF Down Payment Assistance Program (HHF DPA) provides $15,000 in down payment and closing cost assistance to eligible borrowers purchasing an existing home in ten of Georgia s hardest hit counties: Fulton DeKalb, Paulding, Clayton, Muscogee, Douglas, Gwinnett, Chatham, Henry and Bibb. $15,000 in down payment assistance funds are available through the GA Dream Hardest Hit Fund (HHF). The funds are available on a first-come, first-serve basis. Funds will be secured in the form of a second lien on the property with no interest and no monthly payments. The lien is forgiven and released 5 years after the closing date. GWINNETT COUNTY HOMESTRETCH DPA PROGRAM - $7,500 The Gwinnett Homestretch program provides loans of $7,500 at 0% interest to qualified first time homebuyers who purchase homes in Gwinnett County. The funds from this program can be used for down payment and/or closing costs. If the buyer occupies the property and it is their primary residence for 5 years the loan is satisfied and no repayment is required. Be a first time homebuyer Attend a Pre-Purchase 8 hour Buyer Counseling Course by HUD approved housing counseling agency Must be a home in Gwinnett County Must be single detached homes, townhomes, or condominiums constructed after 1977 Maximum purchase price is $200,000 Revised 1/2018 Page 4

6 INVEST ATLANTA Visit for the most up to date information. Invest Atlanta has five (5) Homebuyer Down Payment Incentive Programs: 1. 20Plus 2. HFA Preferred 3. HOME Atlanta Atlanta Affordable Homeownership Program (AAHOP) 5. Vine City Renaissance Initiative Program Basics include: Homebuyer must attend the Invest Atlanta Q & A Session Homebuyer must attend an 8-hour homebuyer education class offered by a Participating Educator Homebuyers must use a Participating Lender Homebuyers must close with a Participating Attorney at approved location Homebuyers must purchase homes in the incorporated City Limits of Atlanta Existing properties must be inspected prior to closing Homebuyers must contribute $1,500 of their own funds to the transaction (items paid for outside of closing count toward contribution) *Incentives may be combined to reduce your funds needed to close. Ask your Invest Atlanta representative for details PLUS Incentive Structure 20PLUS offers 20% of the home purchase price towards your down payment and closing costs, and may be compatible with down payment assistance programs offered by Invest Atlanta community partners. The incentive amount is forgiven after living in the home for 10 years. Homebuyer Requirements Must qualify for 30-year fixed rate FHA or VA mortgage loan with Invest Atlanta Participating Lender Must have a minimum credit score of 660 and maximum debt-to-income ratio of 45% for an FHA mortgage and a credit score of 640 and maximum debt-to-income ratio of 50% for a Conventional mortgage Homebuyer cannot own more than $10,000 in liquid assets $1,200 Program Fee Eligible Properties Single-family detached homes, 2-4 units, townhomes and condominiums, newly constructed or existing, are eligible properties Revised 1/2018 Page 5

7 Property must be located within the city limits of Atlanta Maximum loan limit is $358,800 for FHA loan and $424,100 for Conventional loans. Maximum Income Limit: $55, HFA PREFERRED Incentive Structure HFA Preferred offers a competitive 30-year fixed interest rate, Conventional mortgage with a forgivable 5% grant to help with the down payment and closing costs. The grant is fully forgiven at closing. Homebuyer Requirements Must qualify for 30-year fixed rate Conventional mortgage loan with Invest Atlanta Participating Lender Must have minimum credit score of 640 and maximum debt-to-income ratio of 50% Eligible Properties Single family detached homes, 2-4 units, townhomes and condominiums, newly constructed or existing, are eligible properties All property types are eligible at 3% down payment Maximum purchase price is $424,100 Income limits do apply, see below: 1) One person household: Maximum income is $68,350 2) Two person household: Maximum income is $78,100 3) Three person household: Maximum income is $87,850 4) Four person household: Maximum income is $97,600 5) Five person household: Maximum income is $105, HOME ATLANTA 4.0 Incentive Structure HOME Atlanta 4.0 offers a competitive 30-year fixed interest rate, FHA or VA mortgage with a forgivable 5% grant to help with the down payment and closing costs. The grant is fully forgiven at closing. Homebuyer Requirements Must qualify for 30-year fixed rate FHA or VA mortgage loan with Invest Atlanta Participating Lender Must have a minimum credit score of 660 and maximum debt-to-income ratio of 45% Revised 1/2018 Page 6

8 Eligible Properties Single family detached homes, 2-4 units, townhomes and condominiums, newly constructed or existing, are eligible properties Maximum purchase price is $358,800 Income limits do apply, see below: 1) One person household: Maximum income is $68,350 2) Two person household: Maximum income is $78,100 3) Three person household: Maximum income is $87,850 4) Four person household: Maximum income is $97,600 5) Five person household: Maximum income is $105, ATLANTA AFFORDABLE HOMEOWNERSHIP PROGRAM (AAHOP) Home Buyers receive $10,000 toward the down payment and/or closing costs that is fully forgivable after living in the home for FIVE (5) years. OR, Homebuyers receive $20,000 toward the down payment and/or closing costs that is fully forgivable after living in the home for 10 years. Must qualify for 30-year fixed rate Conventional first mortgage with Invest Atlanta Participating Lender Income cannot exceed program income limits Acceptable minimum credit score is determined by Participating Lender Must contribute $1,500 of own funds towards closing No first-time home buyer requirement (repeat homeowners are eligible) Homebuyer cannot own any other property at closing Home Buyer cannot exceed $10,000 in liquid assets The property must be located in the city limits of Atlanta Property must be owner-occupied, primary residence Single family detached homes, 2-4 units; townhomes and condominiums; newly constructed or existing are eligible properties No manufactured homes Maximum purchase price for new and existing construction in Fulton County is $232,000, and $242,000 in DeKalb County Home Quality Standards and Environment Review inspections are required and paid for by the program Income limits do apply, see below: 1) One person household: Maximum income is $38,200 2) Two person household: Maximum income is $43,600 3) Three person household: Maximum income is $49,100 4) Four person household: Maximum income is $54,500 5) Five person household: Maximum income is $58,950 Revised 1/2018 Page 7

9 5. VINE CITY RENAISSNCE INITIATIVE The Vine City Renaissance Initiative provides 0% interest rate loan in the amount of $10,000. The first mortgage, secured by an Invest Atlanta Participating Lender, must be Conv, FHA, VA, or 203K renovation, 30-year fixed rate loan. The property must be located within the incentive boundaries: Joseph Lowery Blvd. on the west; Donald Hollowell Pkwy on the north; Northside Drive on the east; Martin Luther King Jr. Drive on the south incorporated limits of Atlanta. Property must be owner-occupied, primary residence Single family detached homes, townhomes, and condominiums Income limits do apply, see below: 1) One person household: Maximum income is $68,350 2) Two person household: Maximum income is $78,100 3) Three person household: Maximum income is $87,850 4) Four person household: Maximum income is $97,600 5) Five person household: Maximum income is $105,450 NATIONAL HOMEBUYERS FUND (NHF) UP TO 5% OF LOAN AMOUNT Down Payment Assistance up to 5% of loan amount Grant can be used towards down payment or closing costs. No first time home buyer requirement (repeat homeowners are eligible) FHA, VA, and USDA purchase mortgages Program is for primary residences Maximum income limits apply As of 1/1/2018, the only Georgia lender participating in this program is LAND HOME FINANCIAL SERVICES ( ) NSP UP TO $25,000 IN DOWN PAYMENT ASSISTANCE The Neighborhood Stabilization Program provides up $25,000 in homebuyer assistance depending upon the county and is forgivable within 5 or 10 years. NSP provides affordable housing for low-to-middle income homebuyers. The NSP buys foreclosed homes and make necessary repairs and sells them to new homebuyers. These homes are in very good move-in ready condition. For example, the home could receive a new energy star HVAC unit, energy star-rated water heater, new energy star rated kitchen appliances, new light/fan fixtures, new Revised 1/2018 Page 8

10 counter-tops, new bathroom fixtures, new carpet, new interior and exterior paint, new roof and may even include a chemical barrier treatment for termites. Homebuyers cannot exceed 120% AMI for this program. The NSP program only has a small number of homes at any given time and the down payment money can only be used on NSP homes. Must qualify for a 30 year, fixed FHA first mortgage Can only use the down payment assistance on an NSP home Must be located in the jurisdiction of the NSP Program: City of Atlanta, DeKalb, Douglas, Fulton, Gwinnett, Newton & Rockdale Invest one percent of the purchase price towards the purchase of the home or $500- $1,000 depending on the county and purchase price of the home Be an owner occupant Loan is forgiven within 5 or 10 years from the home purchase date. Provide a Certificate of Completion for both the individual pre-purchase counseling session and homebuyer education workshop. Income limits apply (2014 HUD Income Limits): Family Size 120% AMI 1 $$54,100 2 $61,800 3 $69,550 4 $77,300 5 $83,450 6 $89,650 Eligible Properties: For all jurisdictions above, the only eligible properties are those purchased by ANDP and listed on For more details about the ANDP NSP program, visit or call USDA 100% FINANCING (NO DOWN PAYMENT REQUIRED) There is yet another Down Payment Assistance program in GA that many people are not aware of. It's the USDA's Guaranteed Loan Program and offers 100% financing in rural development areas. Before you dismiss rural development, check it out. It's not necessarily out in the "sticks" and not that far from metro Atlanta, GA. If you qualify, the USDA Guaranteed Home Loan is one of the best no money down programs around today. If you were to buy a home for $150,000 and used an FHA insured mortgage loan the minimum down payment required would be $5, OR 3.5%. The same down payment required with a USDA home loan would be $0.00. To check if a home is in a USDA area visit: Revised 1/2018 Page 9

11 WE DEKALB UP TO 5% OF LOAN AMOUNT Under the WE DeKalb Down Payment Assistance program, each homebuyer receives a 30-year fixed rate fully amortized first mortgage. In addition a non-repayable grant for down payment and closing cost equal to 5% of the initial principal balance of the mortgage. The loan is forgiven at the closing. The mortgage rates are the same as or slightly above market mortgage rates depending on the grant. The program mortgage rates will change periodically. Eligible loans-fha, VA The program uses FHA limits $320,850 Minimum 640 FICO score 45% debt-to-income ratio Property must be residential, owner-occupied and located in DeKalb County New or existing 1-4 units detached, attached, condos, town homes, manufactured homes that meet service/guarantor requirements NOT ELIGIBLE: Recreational, seasonal, or other types of vacation or non-permanent homes Buy-downs are not permitted Co-signers are not permitted Construction to perm is NOT permitted Income limits do apply, see below: 1) One or two person household: Maximum income is $77,280 2) Three or more person household: Maximum income is $90,160 Revised 1/2018 Page 10

12 FACT SHEET: NEW HHF DPA PROGRAM MAKING THE DREAM OF HOMEOWNERSHIP A REALITY At Georgia s Department of Community Affairs, we are focused on creating communities with opportunities thinking out of the box about how to help build communities where life has the possibility of being better and richer and fuller. Owning a home means having a vested interest in where you live. We work hard to increase home ownership across our state. This is the American Dream. And nowhere is that more important than in our hardest hit communities, where many families continue to be impacted by the adverse effects of the housing market collapse and economic downturn. The Georgia Dream Hardest Hit Fund (HHF) was created to reduce obstacles for homeownership and to stabilize those counties that have been the hardest hit with serious delinquency, negative equity, distressed sales and foreclosures. The funds utilized are an allocation of federal dollars received by the Georgia Housing and Finance Authority from the U.S. Treasury. This new program the HHF Down Payment Assistance Program (HHF DPA) provides $15,000 in down payment and closing cost assistance to eligible borrowers purchasing an existing home in ten of Georgia s hardest hit counties. Funds are available on a first-come, first-serve basis. Funds will be secured in the form of a second lien on the property with no interest and no monthly payments. The lien is forgiven and released 5 years after the closing date. Funds available: Counties: Property eligibility: Amount: Form: First mortgage: Rate: Income: Purchase price: Credit score: Additional: Program Highlights $ 15 million Fulton, DeKalb, Paulding, Clayton, Muscogee, Douglas, Gwinnett, Chatham, Henry and Bibb Must be existing; new construction is not eligible $15,000 per household (no PEN or CHOICE upgrades) Recorded second mortgage lien with 0% interest, no monthly payment and forgivable after five years Must be a Georgia Dream first lien (FHA, VA, USDA or conventional 80% LTV or less) First mortgage must be Georgia Dream published rate Same requirements as current Georgia Dream Program; 1-2 persons $59,500 statewide, $69,000 Atlanta MSA; 3 or more persons $68,500 statewide, $79,500 Atlanta MSA (all members of household included) Same limits as current Georgia Dream Program; $200,000 statewide, $250,000 Atlanta MSA Minimum credit score of 640 required Dodd-Frank Certification [the borrower(s) cannot have been convicted within the last 10 years of (a) felony larceny, theft, fraud, or forgery (b) money laundering or (c) tax evasion]

13 LENDER PORTFOLIO LENDING ANDP (Atlanta Neighborhood Development Partnership, Inc.) surveyed seven major lenders, five of which offer one or more portfolio products aimed at the affordable home buyer. Here s a breakdown of the portfolio products available. Please note that every effort has been made to verify this information. Please consult with the lender to confirm elements of their loan products. Make sure to ask OTHER LENDERS if they have similar programs. PRODUCT NAME MIN. CREDIT DOWN PAYMENT AMI CAP MORTG INSURANCE NOTES Chase Dreamaker 620 5% 100% Options Can be paired with Chase grant of up to $1,500. AMI can exceed 100% in highcost areas. PNC PNC Community 660 3% 100% No Can be paired with PNC Community Affordable Second assistance program. RBC AHP % 80% No Can be paired with Federal Home Loan Bank down payment assistance programs. 6% seller contribution max. RBC AHP % 80% No Can be paired with Federal Home Loan Bank down payment assistance programs. 6% seller contribution max. Regions Affordable % 80% No No AMI income cap if home is located in a low-moderate income census tract. Regions Affordable 680 $1,000 80% No No AMI income cap if home is located Wells Fargo 100 CDMP 640 2% 80% No Can be paired with other down payment assistance programs. in a low-moderate income census tract. What is a portfolio lender? A portfolio lender is one that originates mortgage loans and keeps the loans in-house, as opposed to selling the loan in the secondary market (Fannie Mae, Freddie Mac, FHA etc.). In this scenario, the underwriting guidelines are set by the portfolio lender as opposed to the secondary market. Thus, the portfolio lenders are able to provide borrowers with more flexible loan products. Interest Rate & Terms: All lenders above reported that their programs offer 30-year, fixed-rate loans. While interest rates in portfolio programs can be slightly higher than market rates, they are usually offset by the savings found through reduced mortgage insurance and down payment amounts. Check with your lender for the latest interest rate offered. Other program limitations may apply. Consult the lender. Down Payment Assistance: Generally speaking, most lenders allow layering with down payment assistance programs. Be sure to ask your lender if their portfolio product allows support from assistance programs. Where s My Lender? Don t see your preferred lender listed? Contact your lender and ask if they have a flexible portfolio mortgage product.

14 ANDP Homes Veterans Program Available Homes Buying a Home AHAP About ANDP Contact Us ANDP Affordable Home Purchase Programs ANDP Homes offers a number of affordable homes for purchase. Because these homes were purchased and rehabbed with many different program sources, there are different program requirements. Below is a quick overview of our current programs. Note that programs are subject to change. Additional program requirements apply. ANDP HOME PURCHASE PROGRAMS Program Available Jurisdictions Qualifying Homes Amount of Assistance Maximum Household Income Assistance Forgiven? NSP Douglas, Gwinnett and Rockdale counties. Our NSP program homes listed here. Up to $25,000. Varies by jurisdiction 120% AMI. See table below, adjusted for number in household. Yes years depending upon jurisdiction. HOME/CHDO City of Atlanta, DeKalb and Gwinnett counties. Our HOME/CHDO program homes listed here. Amount varies and is determined by homebuyer need. 80% AMI. See table below, adjusted for number in household. Yes years depending upon jurisdiction. PARTNER HOMES Multiple counties in the Atlanta MSA. Our Partner Homes Available as listed here. No assistance automatically paired with these homes. See ANDP Down Payment Assistance programs below for options. 120% AMI. See table below, adjusted for number in household. Varies by source of down payment assistance. For the aforementioned home purchase programs, homebuyers are required to complete an 8-hour Homebuyer Education Course. Homebuyers must also occupy the home they are purchasing and own no other property at time of closing. Homebuyers are often required to contribute a minimum of $1,000 or 1% (amount varies by program and jursdiction) of the price of the home toward the home purchase transaction. Buyer pre-paids such as appraisals, inspections and Homebuyer Education Course fee may be applied toward this requirement. Maximum Household Income Limits Affordable housing programs are designed specifically to aid families who need assistance based upon their income and household size. Income is examined as it relates "area median income" levels as set by U.S. Department of Housing & Urban Development (HUD). Below you will find the income limits based upon category and number of persons in the household. HUD MAXIMUM HOUSEHOLD INCOME LIMITS Household Size 80% AMI 120% AMI 1 $39,050 $58,575 2 $44,600 $66,900 3 $50,200 $75,300 4 $55,750 $83, :12:44 PM]

15 ANDP Homes 5 $60,250 $90,375 6 $64,700 $97,050 7 $69,150 $103,725 8 $73,600 $110,400 Example: To participate in the HOME/CHDO program, it is required that total household income is 80% or less of Area Median Income (AMI). Thus, in the chart below, we see that a family of 4 can have a total household income of no more than $54,550 to participate in the program. Note that programs often have differing income limits. Families purchasing an NSP program home, can earn up to 120% of AMI. Note that maximum household income levels includes all household incomes. To get the latest news and property info, register for Updates and follow us on Twitter and Facebook! 5:12:44 PM]

16 Non-Occupant Borrower Income Flexibility Income flexibilities help to meet the diverse needs of today s home buyers by expanding access to creditworthy, low- to moderate-income borrowers. The non-occupant borrower income flexibility allows a parent, or anyone else willing and financially able, to be a borrower on the loan. Sample Scenario: Loan Underwritten in Desktop Underwriter (DU ) A millennial couple is buying their first home, and his mother would like to help. She is willing and able to be a borrower on the mortgage loan, but she will not live in the home. Because the borrower s mother will be an actual borrower on the mortgage loan, her income and liabilities are considered from a qualifying perspective and will be included in the combined debt-to-income (DTI) ratio. NOTE: The maximum LTV is 95% for DU. The DTI ratio is calculated using the income and liabilities of all borrowers; there is no separate DTI ratio requirement for the occupant borrower. Loans with non-occupant borrowers also are eligible for manual underwriting; however, additional requirements apply, including a maximum LTV of 90%, and the occupant borrower must have a DTI ratio no higher than 43%, based solely on their own qualifying income and liabilities. Good to Know The non-occupant borrower income flexibility is available for all Fannie Mae loans, including HomeReady mortgage. For more information on non-occupant borrower eligibility requirements, refer to Selling Guide section B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers. Requirements for HomeReady Because the income from the non-occupant borrower is being considered for qualifying purposes, it is also considered in determining whether the loan meets the HomeReady income eligibility requirements. For more details, visit fanniemae.com/homeready Fannie Mae. Trademarks of Fannie Mae. Non-Occupant Borrower Income Flexibility Fact Sheet of 1

17 Lender Fact Sheet HomeReady mortgage Built for today s home buyers. Meet the diverse needs of today s buyers and grow your business with the HomeReady mortgage, our premier affordable lending product. Designed for creditworthy low- to moderate-income borrowers, HomeReady offers expanded eligibility for financing homes in low-income communities. Features Financing up to 97% loan-to-value (LTV) for purchase of one-unit principal residence (DU is required for LTV ratios >95%); up to 95% LTV for limited cash-out refi (LCOR) and up to 97% LTV for LCOR transactions in DU when the mortgage being refinanced is owned or guaranteed by Fannie Mae Borrower is not required to be a first-time buyer Cancellable mortgage insurance (restrictions apply); lower MI coverage (25% for LTVs >90% to 97%) compared with standard requirements Gifts, grants, Community Seconds, and cash-on-hand permitted as a source of funds for down payment and closing costs Lenders say The 97% financing option and low mortgage insurance coverage are just two of the benefits as compared to traditional conventional loan programs. Mat Ishbia, President/CEO, United Shore It s a no-brainer for borrowers with greater than 80% LTV and 680 or higher credit score. Derek Travis, loan officer, America First Supports HomeStyle Energy, manufactured housing, and HomeStyle Renovation (approved lenders) Innovative underwriting flexibilities expand access to credit responsibly. Flexibilities include: Rental unit and boarder income Non-occupant borrowers, such as a parent Lender Benefits Certainty. Underwrite with confidence DU automatically identifies potential HomeReadyeligible loans and provides a credit risk assessment. Affordability. Get pricing that s better than or equal to Fannie Mae s standard loan pricing. Take advantage of risk-based pricing waivers for LTV ratios >80% with a credit score >= 680. Simplicity. Combine standard and HomeReady loans into MBS pools and whole loan commitments. Sustainability. Expand access to credit responsibly with homeownership education and housing counseling options for borrowers. Borrower Benefits Low down payment. As low as 3% down payment for home purchase and refinance transactions. Flexible sources of funds. Can be used for the down payment and closing costs with no minimum contribution required from the borrower s own funds (1-unit). Affordable and cancellable monthly MI. Reduced MI coverage requirement above 90% LTV; cancellable MI per Servicing Guide policy. Homeownership education. The online Framework course prepares borrowers for sustainable homeownership; other education and housing counseling options are available Fannie Mae. Trademarks of Fannie Mae. July 31, of 2

18 Simple borrower income eligibility HomeReady is available when purchasing or refinancing any single-family home, as long as the borrower meets the income limits of the property location. (Income eligibility limits may help lenders meet applicable Community Reinvestment Act goals.) The Income Eligibility Lookup tool provides lenders and other housing professionals with a quick and easy way to look up HomeReady income eligibility by address or FIPS code. Borrower Income Eligibility Limit No income limit Area Properties in low-income census tracts 100% of area median income All other properties Homeownership education requirement Knowledge is power. That s why the HomeReady mortgage homeownership education requirement is designed to help borrowers gain essential knowledge to prepare for sustainable homeownership and lenders gain informed borrowers prepared to successfully navigate the loan process. The Framework course makes it simple to meet the requirement At least one borrower on each HomeReady purchase transaction must complete the Framework online education program (see exceptions below). The Framework course, available in English and Spanish, meets or exceeds industry standards and consistently receives high marks from learners. Exceptions For HomeReady loans that involve a Community Seconds or down payment assistance program, buyers may instead complete the homeownership education course or counseling required by the Community Seconds or down payment assistance program as long as it is provided by a HUD-approved agency and completed prior to closing. In addition, the presence of a disability, lack of Internet access, and other issues may indicate that a consumer is better served through other education modes (for example, in-person classroom education or via a telephone conference call). In such cases, lenders should direct buyers to Framework s toll-free customer service line ( ), which can refer consumers to a HUD-approved counseling agency. Finally, buyers who have already completed housing counseling prior to entering a sales contract are not required to complete the Framework course. See below for more details on counseling requirements. Benefits of housing counseling We believe housing counseling from a HUD-approved nonprofit housing counseling agency can help to expand the pool of mortgage-eligible buyers. In addition to helping borrowers prepare for sustainable homeownership and fulfilling the HomeReady homeownership education requirement, housing counseling can provide a benefit to lenders, too. Exclusively for HomeReady purchase transactions on which buyers have received customized assistance from HUD-approved nonprofit counseling agencies before entering into a sales contract, lenders will receive a $500 loan-level price adjustment credit for HomeReady loans delivered with Special Feature Code 184. Learn more fanniemae.com/homeready 2017 Fannie Mae. Trademarks of Fannie Mae. July 31, of 2