What Is a Mortgage Revenue Bond Program?
Mortgage Revenue Bonds (MRBs) are tax-exempt bonds that state and local governments issue through housing finance agencies (HFAs) to help fund below-market-interest-rate home loans and / or down payment assistance for qualifying home buyers. To be eligible, you must be a first-time home buyer, and your household income must not exceed 115% of the median family income in your area.
How MRBs Benefit You
1. The program makes it easier for you to qualify if your income is not high. Because your interest rate is one to two percent lower than the market mortgage interest rates, your home will cost less to own, so you have a better shot at qualifying.
2. Programs like Freddie Mac’s Home Possible mortgages for low- and moderate-income borrowers works in combination with local programs that offer down payment assistance and secondary financing to qualify more borrowers. So you can combine the advantages of down payment assistance with subsidized mortgage interest. That makes it easier for you to achieve home ownership.
Important Points
1. To find out if you qualify income-wise, you can look up the median household income in your area. Multiply by 1.15 and see if your gross (before tax) household income doesn’t exceed that figure. Fannie Mae has a site that lets you look up the income for your town or county. Click HERE to find yours.
2. To find MRB programs in your area, search on “(your state) mortgage bond program” and you should be able to get information on available programs.
3. For example, Nevada’s Home at Last bond program today offers either a 4.875% 30-year fixed rate mortgage or a 3% down payment grant, and allows home purchases up to limits ranging from $258,690 to $409,587, depending on the county. Qualifying income for a household of three or more ranges from $76,820 to $103,320, depending on the county. Your state’s program will differ, depending on its housing prices and income levels.
4. When shopping for a home loan, ask lenders if they fund MRB mortgages. A loan officer who works with these special loans can fill you in about the particulars of your state’s programs. Continue reading ‘Mortgage Revenue Bond Programs for First Timers: Subsidized Interest Rates!’
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