Rabobank has launched a new effort to help low- and middle-income people buy homes, including down payments as low as 3 percent.
The program, known as HomeReady and offered through the federal Fannie Mae system, eases restrictions on what counts toward the borrower’s income. The applicant can list rent from roommates or relatives who will live in the home, and family members elsewhere can sign on to the mortgage.
“If it makes sense, let’s give them credit and get them into a home,” Beverly Martin, a mortgage loan representative in the downtown Modesto office, said Thursday. She works with eight branches in Stanislaus and Merced counties.
Martin said with conventional loans, having parents sign as co-borrowers could mean that the home is not treated as owner-occupied, raising the interest rate.
HomeReady applicants have no income limit if they are buying in a census tract that is considered low- or moderate-income. The limit is $56,800 per year in other parts of Stanislaus County, $44,600 or $52,500 in other tracts in Merced County, and $58,600 or $59,600 in other tracts in San Joaquin County.
The program also eases the requirements for mortgage insurance, further reducing the monthly payments.
The Northern San Joaquin Valley is seeing home prices rise as the slow recovery from the financial crisis of 2008 continues, but Martin said buyers benefit from still-low interest rates.
Rabobank branches throughout California are offering the HomeReady loans. The bank also is a major farm lender.
Fannie Mae is a leading source of money for the nation’s mortgage lenders.
More information is at www.rabobankamerica.com/homeready.
John Holland: 209-578-2385