Fannie Mae My Community loans are different from other 95% financing mortgages in the regard that they have dramatically cheaper monthly mortgage insurance, are subject to income limitations and don’t require any of the borrower’s down payment to be from their own funds. Fannie Mae My Community loans also allow community seconds up to 105% of the purchase price or appraised value; whichever is less. (Community seconds are 2nd lien mortgages that may be funded by a municipality, state, county, state or local housing finance agency, nonprofit organization, or an employer. These loans can assist buyers with down payment and closing costs.) Lastly, this loan allows for extra flexibilities with options to serve teachers, police officers, firefighters, and health care workers, and people with disabilities or a family member with a disability.
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All My Community Mortgages with down payments of less than 20 percent are subject additional underwriting guidelines from mortgage insurance companies so additional restrictions can apply.