Fannie Mae Extends DP Credit, GSE’s Align MH Programs

Fannie Mae is extending for another year its $2,500 credit for very low-income borrowers. 

At the same time, Fannie Mae and its secondary market rival Freddie Mac have aligned their respective manufactured home lending programs, MH Advantage and CHOICEHome, to promote consistency, transparency, and efficiency.

Available for eligible borrowers through Fannie Mae’s HomeReady program, the $2,500 credit addresses barriers to entry for very low-income home buyers, namely their inability to come up with a downpayment and money for closing costs.

The credit, which also can be applied to mortgage insurance premiums, must be provided by the lender, which will then be reimbursed by Fannie Mae.

The credit may be used to satisfy the 3% minimum contribution for all loans secured by one-unit properties, or loans secured by two- to four-unit properties with loan-to-value ratios less than or equal to 80%.

For loans secured by two- to four-unit properties with LTV ratios greater than 80%, the credit may be applied to the downpayment after the 5% minimum borrower contribution is met.

In aligning their standard manufactured home features and lending requirements, Fannie and Freddie say they are underscoring their shared commitment to supporting high-quality, alternative housing products.

The initiative reflects feedback from manufacturers. The aligned specifications establish uniform requirements for permanent foundations, roof pitch, energy efficiency, exterior features, and site improvements.