Major Change for Low-Down Program

Fannie Mae’s Home Possible and Freddie Mac’s Home Ready programs are a minimum 3% down-payment program. It has been one of the best new programs to be introduced since the housing crash of 2008. These programs allow those with moderate income to put just 3% down, yet receive some of the best rates available, and reduced mortgage insurance rates.

Currently, in order to qualify for these programs, the borrower’s income must be at or below 100% of the median income for the area they are wishing to buy a home in. Starting on July 26th, in order to qualify, a borrower’s income cannot exceed 80% of the area’s median income. That 20% reduction in threshold will eliminate many Hawaii families from eligibility. It is important to note that the income limits are based only on the income of the actual borrowers. That differs from the USDA Rural Housing Program, which looks at the income of all members of the home, regardless if they are actually applying or not.

Here are some of the 100% median income limits for selected areas, and their new 80% thresholds:

Area: 100% Income 80% Limit:
Maui $81,400 $65,120
Hawaii Island $78,500 $62,800
Oahu $96,000 $76,800
Kauai $87,000 $69,600

If you are planning on using this program for your upcoming purchase, your file must be submitted prior to the change in program guidelines on July 26th.