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Welcome Home RateBreak 2-1 Buydown
Start Rates As Low As 3.99% (6.455% APR)
With the Welcome Home RateBreak 2-1 Buydown borrowers using the HomeReady or Home Possible mortgage loan options can take advantage of a 100% lender funded buydown to reduce their interest rate 2% in year 1 and 1% in year 2, with year 1 interest rates starting as low as 3.99% (6.455% APR).
Welcome Home RateBreak 2-1 Buydown Program Guidelines
Loan Purpose
- Purchase
Credit Profile
- 620 minimum middle credit score for all borrowers on the loan
- Findings must be Desktop Underwriting “Approved/Eligible” or LoanProspector “Acccept”
- Waiting period after a major negative credit event
| Conventional Loan Type | BK – Chapter 7 | BK – Chapter 13 Discharged | BK – Chapter 13 Dismissal | Foreclosure* | Short Sale, Deed-In-Lieu, Pre-Foreclosure* | Modified Mortgage* |
|---|---|---|---|---|---|---|
| Standard | 4 years | 2 years | 4 years | 7 years | 4 years | 2 years |
| With Extenuating Circumstance | 2 years | 2 years | 5 years | 3 years (requires 10% down) | 2 years | No waiting period |
* If a property was included AND surrendered (i.e. property wasn’t retained and the debt wasn’t reaffirmed) in a Chapter 7 Bankruptcy, the borrower may potentially be able to defer to the Chapter 7 waiting period Vs. the Foreclosure waiting period.
Income Restrictions
- Borrower income of 80% or less of the Area Median Income for the property location
- If the subject property is in an underserved area the Area Median Income requirements may be waived
- Income is based on income reported on the loan application. For example, if the borrower income includes both a base income and overtime, but doesn’t need overtime to obtain loan approval, the overtime income can be excluded from the loan application to meet the Area Median Income requirements of the loan program
- Income of the household is not evaluated
- Use the Fannie Mae Tool or Freddie Mac Tool to determine Area Median Income and underserved areas
Loan Amount
- Loan amount not to exceed $350,000
- Maximum home purchase price can’t exceed $437,500
Mortgage Insurance
- For loan to value over 80% mortgage insurance will be required
Ratios
- As determined by Automated Underwriting System
Property Type
- Owner-occupied only
- Single Family Residence properties
- 1-4 Units
- Eligible condos
- PUD’s (i.e. Townhomes)
Documentation
- All loans must be fully documented per Agency Guidelines
- For Self Employed borrowers, in addition to Agency Guidelines, two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)
- A First-Time homebuyer class may be required
Down Payment/Closing Costs – Purchase
- Minimum 3% down payment based on the purchase price
- Maximum allowable seller contribution toward buyers closing costs and escrows:
- 3 to 9.99% down payment up to 3% of the purchase price
- 10% or more down payment up to 6% of the purchase price
Terms
- Amortization period: 30-year fixed rate
Talk to a Welcome Home RateBreak 2-1 Buydown Program Mortgage Expert
Not ready to apply online? No problem.
Answer a few questions, and a Welcome Home RateBreak 2-1 Buydown Program Home Loan Mortgage Expert will call you back.
