In some parts of the country a decent house in a good school district could requite $25,000 for a 10% down payment, plus payments of $2,500 per month. Our country has great wealth and many people can afford the cost of living in these areas. However for some key people that work in the community it is hard to afford to live there. Several plans have been designed to help select professions to own affordable homes. The largest by far are programs from Fannie Mae and Freddie Mac.
The Freddie Mac Home Possible Neighborhood Solution Mortgage is a specialized program to help key members of our community afford a home. Eligible homebuyers include teachers, healthcare workers, law enforcement workers, firefighters, and military personnel.
Benefits of the program include loan amounts up to 100%. This allows for a small or no down payment. The finance rate is very good and variable or fixed rates are available up to a 40-year term. The private mortgage insurance (PMI) requirements are low and this helps keep the payments low. Debt-to-income ratios are more flexible for this program which means you may be able to qualify for a larger loan. (The maximum debt to income limit is generally around 45% of your total household income. ) There is also an option for a subsidy buydown. A buydown reduces the interest rate, and the monthly payment, for up to three years. Customers can also use the Neighborhood Solution program to refinance out of a higher rate mortgage to get lower monthly payments.
Eligible properties include single family homes and condos. New construction homes qualify but manufactured homes do not. Customers must occupy the home as their primary residence. Credit should be fairly good but not necessarily perfect. Other conditions apply and you should consult with a local loan officer for full details about the program.
Freddie Mac has the mortgage for about 1 in 6 homes in the USA. However Fannie Mae is even larger and has programs that compete with Freddie. The Fannie "Community Solutions" program is very similar to the "Neighborhood Solution" plan. They are so similar that it is hard to say which is best but the "Community Solutions" program is better known and may be offered by more lenders. Other options are available and there is no single plan that is best in every case. This means it is advisable to research your options before selecting a mortgage.
Texas residents can get more information at our Houston Freddie Mac Neighborhood Solution site. Or call our Houston office at 281-537-7800.
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- Also visit our insurance site at http://www.houston-renters-insurance.com
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