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There is a conventional loan program out there that allows for minimum down payment and reduced mortgage insurance, and it’s not just for first-time buyers. It’s called a Home Ready loan.
Cash is a big obstacle for nearly all home buyers. Fannie Mae’s Home Ready loan program was created to help low-to-moderate income buyers with decent credit buy or refinance a home.
You don’t need to be a first-time buyer, but you can’t own a home at the time of closing. Your minimum down payment is just 3% of the purchase price, and that includes condos. It’s the only program I know of where you can put that little down payment on a condo.
The income limits for this loan are 80-100% of the average median income, which is right around $71,200 in Ohio and Kentucky. Home Ready loans also have a reduced mortgage insurance premium, and are eliminated once your value hits a certain level.
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You don’t need a boatload of cash to buy.
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There are no price adjustments on buyers with higher or lower credit scores. There are also no minimum borrower contributions, and all costs and down payments can come from gift funds.
Rental income from a border or accessory dwelling can be used to offset high debt-to-income ratios. It also allows non-borrowers’ income to be used. Finally, it can be used to refinance a home. You can do a limited cash out of up to 95% of the value of your home. This is a great program for home buyers and homeowners.
If you are interested in buying or refinancing with this type of loan in Ohio or Kentucky, give me a call or send me an email. I’d love to help you out!