WASHINGTON (7/1/14)--Fannie Mae, a CUNA Strategic Services alliance provider, has posted updated area median incomes (AMIs), which are the basis for the income limits for MyCommunityMortgage (MCM).
AMIs are established by the U.S. Department of Housing and Urban Development and provided to Fannie Mae annually by Federal Housing Finance Association.
MCM is program was designed by Fannie Mae to provide low rates, minimal risk-based price adjustments, and reduced mortgage insurance costs to low- to moderate-income home buyers who meet certain requirements.
Under MCM, a borrower's income can be up to 100% of AMI, or 115% of AMI in non-metro areas, or higher limits in specified high-cost areas.
For one-unit transactions, no minimum contribution the borrower's own funds are required.
Minimum mortgage insurance coverage under the MCM program includes:
- 16% for 90.01% to 95% loan-to-value (LTV);
- 12% for 85.01% to 90% LTV; and
- 6% for 80.01% to 85% LTV.
MCM loans are not subject to the loan-level price adjustment for minimum mortgage insurance coverage.
Mortgage insurance can be financed up to 95% LTV, including the financed mortgage insurance for fixed-rated mortgages (90% for adjustable-rate mortgages).
Acceptable sources of funds for down payment and closing costs include personal gifts, gifts or grants from a qualified entity, employer assistance, and Community Seconds mortgages.
The Community Seconds option combines a first mortgage that Fannie Mae purchases with a subordinate mortgage. The subordinate mortgage may be funded by a state, county or local housing agency, a nonprofit organization, or an employer; it may be used to finance the down payment or closing costs.