Our signature low down payment product. The Advantage HomeBuyer Program enables borrowers to use a greater amount of their monthly income
toward housing costs compared to other standard mortgage products. It is part of a
suite of mortgage products and options designed to help low- and
moderate-income borrowers overcome the two primary barriers to homeownership: lack
of funds for the down payment and insufficient income to qualify.
This is a fixed-rate mortgage, with terms between 15 years and 30 years. It is ideal for
the potential low- and moderate-income home buyer who has enough income to handle
monthly mortgage payments, but is having difficulty accumulating cash for the down
payment.
Loan Features
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Down payment of 5 percent
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30-year, 20-year, and 15-year repayment periods (fixed-rate mortgages only; no
ARMs allowed).
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Up to 38 percent of borrower's monthly income can be used for housing costs and
other debts, such as credit cards or student loans, and up to 33 percent of borrower's
gross monthly income can be used for housing costs (principal, interest, taxes, and
insurance).
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To qualify for this loan, you must earn no more than 100 percent of the area median
income for your Metropolitan Statistical Area (MSA) or county. However, exceptions
to the area median income limit are available in specified high-cost areas.
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The maximum income limit is removed if this mortgage is combined with the Fannie
Neighbors® mortgage option for eligible properties located in HUD-designated central
cities, underserved areas, and eligible minority and low-income census tracts.
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Does not require that you have cash reserves after closing
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You must attend a home buyer education session offered or approved by your
lender. This requirement can be waived if borrowers meet all three of the following
conditions: (1) they have previously owned a home; (2) they make at least a 5
percent cash down payment from their own resources (not a gift, loan, or grant); and
(3) they have at least two months’ mortgage payments in reserve after closing.
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Can be used to buy one-family, principal residences, including condos and properties
located in a planned unit development.
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Can be used with Fannie Mae's Community Seconds®, Community Land Trust,
FannieNeighbors, and Lease Purchase options.
Considerations
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The 5 percent down payment requirement means you need less cash up front to buy
a home.
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The expanded debt-to-income ratios enable you to qualify using up to 33 percent of
your gross monthly income for housing expenses (instead of the standard 28 percent
with traditional conventional mortgages) and 38 percent for your total monthly debt
expenses (instead of the standard 36 percent).
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To qualify for this loan, generally your household income must not exceed the area
median income. Check with your lender or industry professional to determine if your
property falls within a specially designated area that allows a higher household
income limit or provides an exemption from the income limit.
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