Fannie Mae makes it tougher for First Time Home Buyers in Delaware

Fannie Mae made significant changes to its Desktop Underwriting (DU) for My Community programs.  The guidelines have changed to make it harder for first time home buyers to qualify for a mortgage to purchase a home with little to no money down.  The guidelines took effect May 19, 2007.  Borrowers who qualified before May 19th, may no longer qualify under the new guidelines.

This affects people trying to qualify for the Delaware Bond Program loans for Delaware first time home buyers because these loans must qualify through Fannie Mae’s DU.  Fannie Mae wasn’t specific about what exactly won’t qualify but it seems anybody with a credit score below 620 certainly won’t qualify anymore.

So what are the best options now for first time home buyers in Delaware?  The answer is FHA. FHA is not credit score driven and can be manually underwritten so borrowers are allowed to make their case for receiving financing.  FHA will lend up to 96.5% Loan to Value (LTV) and only requires the borrower to bring 3.5% to the transaction.  This 3.5% can be a gift.  The seller is allowed to pay up to 6% towards closing costs.  FHA also has a FHA Streamline refinance option which makes it very easy to refinance to a lower interest rate.

For more information about your loan options for buying a home in Delaware please feel free to contact me at 302-703-0727.

If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713