Fannie Mae said a $2,500 credit will help very low-income borrowers with down payment and closing costs.

WASHINGTON – Fannie Mae announced a $2,500 loan-level price adjustment credit for very low-income purchase borrowers through its HomeReady mortgage program.

Similar to other mortgages backed by Fannie Mae, HomeReady requires 3% down and PMI. The new credit can be used for down payments and closing costs.  Borrowers must have a qualifying income of less than or equal to 50% of the applicable area median income of the subject property’s location.

Fannie Mae said the credit will be effective for whole loans purchased (“purchase ready” status in loan delivery) on or after Mar. 1, 2024, to Feb. 28, 2025, and for loans delivered into MBS with issue dates on or after Mar. 1, 2024, to Feb. 1., 2025.

“The full amount of the $2,500 credit must be provided directly to the borrower through the transaction, such as being applied to down payment and closing costs, including escrows and mortgage insurance premiums,” the organization said.

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Author: amyc