First Time Homebuyers

There exist two first time home buyer mortgage programs that can help borrowers with their first home purchase. These mortgage programs have different guidelines, and can be beneficial to borrowers with bad credit, no money down, low credit score, no credit score, and borrowers who just acquired a full time job.

MyCommunity Mortgages
MyCommunity Mortgage progams have been gaining popularity with the new terms that have been released. This mortgage program was designed by Fannie Mae for low and moderate income borrowers. This 1st time home buying program is also considered a zero down mortgage program. It has a no minimum borrower contribution. Here are the key features of the MyCommunity mortgage program.

1. No minimum borrower contribution.
2. Up to a 40 year mortgage loan term.
3. Lower monthly payments with a 5 year or 10 year ARM interest-only term.
4. Funds for down payment, and closing costs can be received from a wide range of sources, such as a gift from family members, grants or loans from a nonprofit organization, municipality or employers, or the borrower’s own funds.
5. Loan-to-value LTV ratios up to 100% for 1 unit residences.
6. Flexibility on credit file histories, including nontraditional credit file histories.
7. Flexibility on sources of income including boarder income even if boarders are not related to the borrower.
8. Funds for reserves for closing not required in most cases.
9. Part-time & overtime income is considered.
10. Purchase a single family home (including a condo or coop), a two, three, or four family home to live in one unit, and rent out the others (minimum 3 percent borrower contribution for two to four unit properties).

HomePossible Mortgages
HomePossible Mortgage programs are another source for 1st time home buyers. This mortgage program was designed by Freddie Mac to provide a first time home buyer’s program equal to the MyCommunity Mortgage program. It isn’t widely known as the MyCommunity mortgage products, but it has helped many homeowners with their first home purchase. The four Home Possible Mortgage programs are: Home Possible 100, Home Possible 97, Home Possible Neighborhood Solution 100, and the Home Possible Neighborhood Solution 97. Designed to help the home financing needs of borrowers looking for low down payments, flexible sources of funds, 1st time home buyers, move up borrowers, retirees, families in underserved areas, and new immigrants. Here are a few key features of the HomePossible Mortgage programs.

1. Borrower Contribution not required on 1 unit Primary residences. (Excluding Manufactured Homes.
2. Flexible credit terms, included expanded ratios and options for low credit borrowers.
3. Low mortgage insurance coverage levels.
4. Flexible sources of funds.
5. 15, 20, 30, and 40 year fixed rate mortgage programs.
6. 5/1, 7/1, 10/1 CMT & LIBOR Indexed ARMs (2/2/5 caps)
7. 1 to 4 unit Primary Residences.
8. Secondary Financing including Affordable Seconds.
9. Rate/Term Refinancing to 100% LTV (No Cash Out)
10. Seller contributions to 6% in most cases.