How do you qualify for a Fannie Mae loan program?


Quick Answer

To qualify for a Fannie Mae loan program as of 2015, a borrower should have a front-end debt-income-ratio of at most 28 percent, attain the required credit score and provide necessary financial information, as Investopedia explains. The borrower should deposit a certain down payment before applying for the mortgage.

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Full Answer

After finding a home, the borrower should contact a lender to approve the property, notes SFGate. The borrower also needs to pay a deposit of $500 electronically before the lender inspects the home. The lender should have an approval from a government-sponsored enterprise, or GSE, according to Investopedia. Fannie Mae doesn't issue loans directly to buyers and instead transmits the loans via lenders.

If the borrower has a single family and intends to use the property as a primary residence, the borrower should have a credit score of at least 620 to qualify for a fixed-rate mortgage, while to apply for adjustable rate loan, the buyer should have a FICO score of at least 640, according to Investopedia. A person with a higher score may get a low-interest loan.

An interested buyer should make a down payment of at least 5 percent in order to qualify, according to Investopedia. If the DTI is high, the buyer is likely to place a high down payment, which translates to low monthly costs. The buyer should submit all financial information with relevant supporting documentation, and records of car payments, child support and credit cards may also be important.

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