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New Fannie Mae Lending Product Counts Extended Family Income

By Faye Ricci on August 25, 2015
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Today, Fannie Mae announced a new lending product, the HomeReady mortgage, which is intended to help creditworthy borrowers with low and moderate incomes to gain access to a mortgage. In order to qualify for the HomeReady mortgage, borrowers will be required to complete an online education course, called “Framework”, to educate and prepare them for the home buying process.

For the first time, income from a non-borrower household member can be considered to determine an applicable debt-to-income ratio for the loan. This includes allowing income from non-occupant borrowers, such as parents, and rental payments, such as from a basement apartment, to be included in a borrower’s qualifying income. Down payments for a HomeReady mortgage can be as little as 3% and will be available for first-time and repeat homebuyers.

Fannie Mae expects to provide additional detail to lenders through a Selling Guide announcement in the coming weeks. HomeReady guidelines will be included in the Desktop Underwriter in late 2015 and will automatically flag borrowers that are potentially eligible for a HomeReady loan.  It is also expected that Fannie Mae will accept home deliveries under the HomeReady guidelines beginning in late 2015.

Photo of Faye Ricci Faye Ricci

Faye has broad experience as a corporate and financial institutions attorney. Her transactional experience includes financing transactions, secondary market mortgage transactions, public and private securities offerings, 1934 Act reporting, securitizations, and derivatives. As a corporate attorney, Faye has represented a variety of corporate…

Faye has broad experience as a corporate and financial institutions attorney. Her transactional experience includes financing transactions, secondary market mortgage transactions, public and private securities offerings, 1934 Act reporting, securitizations, and derivatives. As a corporate attorney, Faye has represented a variety of corporate clients, including banks, mortgage servicers, broker-dealers, residential and commercial mortgage originators, and other financial institutions.

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  • Posted in:
    Banking, Finance and Securities
  • Blog:
    Bank Law Monitor
  • Organization:
    Miller Nash Graham & Dunn LLP

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