Teachers and Public Service Workers Get A Mortgage Break
If you are a teacher or a public service worker, there is good news in store for you. Did know that teachers and public service workers can now qualify to purchase a house with as little as $500 or 1 percent of the sale price depending on which value is less? Besides this, the prescribed guidelines for them to get a mortgage is less strict than what is normally required by borrowers.
Under the FNMA’s MyCommunity Mortgage Program, teachers and public service workers can get 100 percent financing to purchase a home. They are further allowed to borrow another 5 percent through a bank using the community loan program. They can use this money to close the loan, pay property taxes and insurance.
In other words, teachers and public service workers can seal a home deal with just $500 if they qualify for a mortgage. However, in most areas under the loan program, income limitations are restricted to 100 percent of the area’s median income. The good news is that in some areas in the country 120 percent is allowed, while others do not have any income restrictions.
The people who are eligible for this type of mortgage loan are teachers, administrators in elementary or secondary schools, public safety employees working in the police department, sheriff’s office, university, hospital, airport and port authority, and fire department personnel who respond to distress calls.
According to the loan program, the loan applicants have a more flexible underwriting guideline. So even if their debt-to-income ratio is 45 percent, they will still qualify for the mortgage. Teachers and public service workers who do not have enough established credit can also qualify. The only criterion imposed is that the borrower has a 12 month rental history with no delinquency, and no delinquency on anything else in the last 12 months.
Borrowers have to use the mortgage to purchase a home to live in. The home cannot be used for rental. It has to necessarily be a single family residence and not a duplex. Though, condos are permitted. In 38 states, the maximum loan amount is $417,000 while in Hawaii and Alaska it is $650,500.
Imagine being able to own a home after paying just $500 and then getting 100 percent financing? Now, is that good news or what?
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