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How do people with few assets/money in the bank/single low income household qualify for 3% down conventional loans? The OP sounds very much in FHA territory to me(?)
It's Fannie Mae's Home Ready program and it's far better than FHA. The mortgage insurance is much lower and a buyer can eventually have it dropped when they've acquired 20% equity in their home. The "catch" to the program is that it does have an income cap, depending on state and county. In other words, if someone makes too much money they won't qualify for the 3% down, but could still qualify for a conventional with as little as 5% down.
It's Fannie Mae's Home Ready program and it's far better than FHA. The mortgage insurance is much lower and a buyer can eventually have it dropped when they've acquired 20% equity in their home. The "catch" to the program is that it does have an income cap, depending on state and county. In other words, if someone makes too much money they won't qualify for the 3% down, but could still qualify for a conventional with as little as 5% down.
That sounds like a good idea. I will look into that. Thank you.
It's a very common program, I do 3% down all the time. If they have the cash to close (or use grant programs) as long as they meet debt to income requirements they are fine.
Montana Department of housing has several loan programs to consider. You can even search for a lender near you. Find someone that offers the State programs and FHA. Ask them to show you program comparisons.
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