Fannie Mae has introduced "Desktop Underwriter (DU) Refinance Plus", a new program designed to reignite the mortgage industry by streamlining the refinance process for potentially millions of Americans. Fannie Mae has loosened the rules for homeowners seeking lower monthly payments.
The less-stringent criteria includes lower acceptable credit scores, reduced income documentation, as well as waiving the requirement for appraisals in certain scenarios. More specifically, Fannie Mae allows homeowners to refinance up to 105% and 125% of the current value of their home and will accept borrowers with credit scores below their current 580 requirement. The reduced documentation requirement results in borrowers submitting a single, current pay stub, rather than the traditional two.
The objective of DU Refinance Plus is to benefit borrowers by assisting them to remain in their homes. Lenders are encouraged to reduce a borrower's monthly principal and interest payments, provide a more permanent product (such as refinancing an adjustable-rate mortgage into a fixed-rate mortgage) whenever possible, or both.
The HomePath Mortgage Program was created by Fannie Mae to allow homebuyers buying a Fannie Mae repossessed home some perks. Some of these perks make the HomePath loan program more advantageous over FHA Home Loans.
Home buyers looking to purchase a Fannie Mae repossessed home can use the HomePath Mortgage Program, an FHA or some other type of financing, or even pay cash. If you are looking to purchase one of these Fannie Mae homes and you need to finance it you may want to consider the HomePath Mortgage for the following three benefits.
HomePath Mortgage Program Advantages Over FHA Home Loans
• Less Money For Your Down Payment - the HomePath mortgage only requires a minimum down payment of 3% versus 3.5% required for an FHA mortgage. With both of these mortgage options the down payment can come in the form of a gift.
• No PMI - PMI (Private Mortgage Insurance) is typically required for mortgages that have a loan balance that is greater than 80% of the home's value or sales price. With the HomePath Mortgage you may not be required to pay PMI but you will have to pay PMI if you get a FHA Loan. With no PMI required you could save yourself a few hundred dollars with a HomePath loan.
Good Neighbor Next Door
Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.
How The Program Works
Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.
How to Participate in Good Neighbor Next Door
Check the listings for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD's regulations for the program.
HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this "silent second" provided that you fulfill the three-year occupancy requirement.