Thursday, August 5, 2010

3% Down Mortgages from Fannie Mae

3% down payment mortgages from Fannie Mae are still available! They never went away!

They're called Flexible mortgages and the "flexible" part means that the 3% down payment can come from what Fannie Mae calls "flexible" sources. Gifts or loans from relatives are the two most common sources of flexible funds.

Here are some of the highlights of these loans:

- There are no income limits.
- Down payment is only 3% of the purchase price.
- There is no "up-front mortgage insurance premium" like there is with FHA loans. There is monthly mortgage insurance.
- The down payment and closing costs can come from "flexible" sources: primarily gifts or loans from relatives.
- They are for 1-unit primary residences only.
- They are not only for first-time home buyers. As long as the property will be the buyer's primary residence, it doesn't matter if they own other property.
- They are all underwritten using Fannie Mae's online underwriting system for quick approval decisions.
- The seller can pay up to 3% of the purchase price towards the buyer's closing costs.

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