A New Twist To An Old Program

Can the market for mortgages be softening? Way back in 1993, the federal government came out with a program called "My Community".  This mortgage program was granted to people who wanted to do a conventional loan yet didn't have the required 5% down payment.   This program offered 97% financing, thus the need to only put 3% down on a prospective house.  At the time,  FHA mortgages required only 2.25% down payment, but the house had to pass rigorous inspections by the appraiser in order to qualify for an FHA mortgage.  Peeling paint and minimum distances between well and septic tanks, were some of the problems associated with getting a  house to pass through FHA's tough standards.  Since conventional loans didn't have such requirements, this new "97 My Community" offered a better alternative to the FHA loan.

Again,  they've introduced a new and improved "My Community" 20 years later.  For a few years,
when the housing bubble burst in 2008, the government cracked down on mortgages limiting many lenders to 10-20% down payment requirements for conventional loans.  Now the lending guidelines have slowly been easing and now history has repeated itself 20 years later. The program requires only 3% down payment from the buyers own money.  A gift is not allowed for the down payment minimum requirement to be met by the borrower.  The seller can contribute 3% of the selling price toward the buyer's closing costs.  Back in 1993, there wasn't any internet to help determine a borrower's credit worthiness.  There wasn't even such a thing as credit scores. 
They relied on the appearance of a person's credit history, as it appeared on a report to determine how strong of an applicant they appeared to be.  Now, everything is decided by the software used by the government agencies to determine eligibility of a buyer.  This newest version of "My Community"
offers a new twist for spouses or roommates who can't be on the mortgage.  In terms of qualifying for the loan, we can now use occupying spouses and roommate's income  who won't be on the mortgage.  Perhaps their credit scores aren't good enough to be listed on the loan, or maybe they will be living there temporarily.  We can use a percentage of these co-habitator's income for the purpose of helping the borrower to qualify for the home. 

For more specifics on this and many other programs, please ask the Mortgage Man.  I am licensed to do mortgages in the state of Pennsylvania.

Andy Williams
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972
NMLS # 118317