
Special loan program for first-time buyers!In mid-November, both Fannie Mae and Freddie Mac made homebuying ridiculously less expensive for many, if not most first-time homebuyers!
Much of this content was borrowed from JVM Lending/Jay the blogger – with encouragement and permission. Read on…
FACTORS THAT IMPACT YOUR INTEREST RATE!
There are plenty of articles about factors that impact someone's mortgage rate – reminding readers that there is no “one interest rate” for every borrower, and that rates can vary by as much as 2% from borrower to borrower. This is because factors like property type (Condo vs. SFR), credit score, down payment % and even loan amount can significantly impact someone’s interest rate.
AND – Fannie and Freddie are currently IGNORING many of those factors for a lot of first-time homebuyers.
And that in turn can give first-time homebuyers an interest rate that is as much as 1% lower than it would otherwise be.
QUALIFICATIONS FOR THESE LOWER RATES
• First-Time Homebuyer: Someone who has not bought a home in 3 years.
◦ Technically not only a first time buyer, but a repeat buyer who hasn’t bought or owned a home in the last 3 years – bonus!
• Area Median Income (AMI): Income must be less than AMI in low-cost areas (most of TX for example), and less than 120% of AMI for high-cost areas (the SF Bay Area). AMI is almost $100,000 for much of Texas and 120% of AMI is over $180,000 for the Bay Area – so this limitation is not that restrictive.
• Purchase Only: Loan cannot be a refinance.
• Primary Residence Only: No investment properties or 2nd homes.
AM I OVERHYPING THIS?
Not even close. For example, if a first-time homebuyer purchases an $800,000 condo in the Bay Area with 5% down and a 680 credit score, her rate would be as much as 1% LOWER now because of this program. Normally, the 680 score, the small down payment %, and the condo would all result in interest rate increases. But those increases are ignored with this new program.
WHY IS FANNIE OFFERING THIS AND WILL IT LAST?
Fannie and Freddie are offering this program as a legitimate way to help first-time buyers in a higher rate environment, and as a way to help keep the housing market healthy.
It is much like the programs that were offered for buyers after the 2008 meltdown – and NONE of them lasted.
This program too will likely disappear sooner rather than later (likely when the spring buying season heats up).
With only 88 detached homes for sale in all of Concord, and many sellers that have become more flexible…give me a call and lets see if we can put something affordable together for you too!
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