Introduction
The Home Possible mortgage is a popular financing option for homebuyers, offering low down payment requirements and flexible eligibility criteria. In this article, we will explore the entity responsible for introducing the Home Possible mortgage and delve into the details of this mortgage program.
Fannie Mae: The Creator of Home Possible Mortgage
Fannie Mae, the government-sponsored enterprise (GSE), is the entity that introduced the Home Possible mortgage. Fannie Mae is a leading source of residential mortgage credit in the United States, providing liquidity to the mortgage market by purchasing and securitizing mortgages originated by lenders.
The Home Possible mortgage program was launched by Fannie Mae in 2014 as an affordable housing initiative. It was designed to help low to moderate-income borrowers overcome the barriers to homeownership, particularly the challenge of saving for a down payment.
Key Features of Home Possible Mortgage
Low Down Payment: One of the standout features of the Home Possible mortgage is the low down payment requirement. Borrowers can finance up to 97% of the home’s value, with only a 3% down payment. This makes homeownership more accessible for individuals who may not have substantial savings for a larger down payment.
Flexible Eligibility Criteria: The Home Possible mortgage also offers flexible eligibility criteria, making it easier for borrowers to qualify. It allows for non-traditional sources of income, such as rental income, boarder income, and even income from non-borrowing household members, to be considered during the qualification process. This flexibility expands the pool of eligible borrowers, including those with diverse income sources or multi-generational households.
Reduced Mortgage Insurance: Another advantage of the Home Possible mortgage is the potential for reduced mortgage insurance costs. Borrowers who finance more than 80% of the home’s value typically have to pay private mortgage insurance (PMI). However, Home Possible mortgages offer the option of canceling or reducing the PMI once the loan-to-value ratio reaches a certain threshold, potentially reducing the overall cost of homeownership.
Expanding Access to Affordable Housing
Fannie Mae’s introduction of the Home Possible mortgage aligns with its mission to expand access to affordable housing. By offering low down payment options and flexible eligibility criteria, this mortgage program aims to help more individuals and families achieve the dream of homeownership.
The Home Possible mortgage is particularly beneficial for first-time homebuyers and those with limited financial resources. It provides an alternative to traditional mortgage programs that may require higher down payments and stricter qualification standards, making it an attractive option for borrowers who may not meet the criteria of other loan programs.
Conclusion
In conclusion, the Home Possible mortgage was introduced by Fannie Mae, a government-sponsored enterprise. This mortgage program offers low down payment requirements, flexible eligibility criteria, and the potential for reduced mortgage insurance costs. By creating the Home Possible mortgage, Fannie Mae aims to expand access to affordable housing and help more individuals and families achieve homeownership.
References
– Fannie Mae: www.fanniemae.com
– Home Possible Mortgage: www.fanniemae.com/content/fact_sheet/home-possible-mortgage-fact-sheet.html
