24-18: Temporary Down Payment Assistance Product Enhancement for Fannie Mae HomeReadyⓇ and Freddie Mac Home PossibleⓇ

02/29/2024
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Pennymac is pleased to announce a new down payment assistance (DPA) enhancement to the Fannie Mae HomeReady and Freddie Mac Home Possible products. The enhancement includes a $2,500 assistance amount for very low-income purchase (VLIP) borrowers that can be used for down payment and closing costs.

Fannie Mae HomeReady

Effective immediately, eligible HomeReady purchase borrowers may receive $2,500 assistance, if the loan meets certain requirements:

  • The loan must be underwritten in DU and receive an Approve/Eligible.
  • The borrower(s) must have qualifying income less than or equal to 50% of the area median income limit for the property’s location.
  • The full amount of the assistance must be applied directly to the borrower through the transaction and applied to down payment and/or closing costs.
  • The assistance can fulfill the 3% minimum contribution requirement for loans on single family properties or for loans on 2-4-unit properties with LTV ratios up to 80%.
  • Evidence of the $2,500 assistance to the borrower must be reflected as its own line item in Section L on the final CD, and retained in the loan file. Refer to screenshot example on page 2 of this announcement.
  • All other Fannie Mae and Pennymac HomeReady program requirements apply. Please refer to the Fannie Mae VLIP job aid for assistance.
  • Loans must be delivered on or before 1/10/2025.

Freddie Mac Home Possible

Effective immediately, eligible Home Possible purchase loans may receive $2,500 in assistance if the loan meets certain requirements:

  • The loan must be underwritten in LPA and receive a Risk Class of Accept.
  • The borrower(s) must have qualifying income less than or equal to 50% of the area median income limit for the property’s location.
  • The full amount of the assistance must be applied directly to the borrower through the transaction and applied to down payment and/or closing costs.
  • The assistance may be used to offset the 3% minimum contribution requirement from borrower personal funds.
  • Evidence of the $2,500 assistance to the borrower must be reflected as its own line item in Section L on the final CD, and retained in the loan file. Refer to screenshot example on page 2 of this announcement.
  • All other Freddie Mac and Pennymac Home Possible program requirements apply. Please refer to the Freddie Mac VLIP job aid for assistance.
  • Loans must be delivered on or before 1/10/2025.

Final CD Example:

Please contact your Sales Representative for complete program details and loan purchase requirements.