Jersey 97% Home Loans
Home Buyer 97% Home Loans and Mortgages
Home Buyer (CHB) 97 is a conventional fixed rate home loan
that is designed to assist first time home buyers with flexible
mortgage qualifying terms. The loan is a fixed rate mortgage
in which the monthly payments remain the same over the life
of the loan. Once the mortgage is in effect, the interest
rate does not fluctuate but remains constant.
year fixed rate loan is one of the most commonly used mortgages
for residential financing in America. The greatest advantage
for a home buyer is the predictability of the payments each
month because it never changes. This type of loan is often
recommended for home buyers living on a fixed income, a set
budget, or those planning on living in their home for more
than five years. If interest rates increase, the loan rate
will remain the same. Unfortunately should rates decline below
the set interest rate on the loan, the only way to change
it is to refinance the mortgage and incur a loss of equity
or additional closing costs to take advantage of the lower
difference between the CHB 97 and other conventional home
loans is the reserve requirement. The CHB 97 only requires
a 1 month cash reserve. Also, the CHB 97 limits the borrower's
income to 100% of the median income for the area.
following are highlights of this loan program:
Payment Requirements: The minimum down payment required
for this type of loan is 3% of the sales price for owner-occupied
and employment: The borrower's income is limited to 100%
of the median income for the area. As for employment, there
are no limitations on a specific length of time at a particular
job. However, a 2 year history is required, preferably in
the same line of work (education can be counted towards this
2 year history if it is for the same profession the borrower
is currently in).
properties and occupancy requirements: Single family attached
and detached homes, 2 to 4 unit properties, planned urban
developments (PUDs), and Fannie Mae or Freddie Mac approved
condominiums. Second homes and investment properties are not
eligible under this program.
Costs: Closing costs and prepaids may be paid by interested
parties (i.e. seller) as long as they are considered in the
contribution limitation. For primary residences, the seller
may contribute up to 3% of the sales price if the buyer is
putting less than 10% down. If the buyer is putting 10% or
more down, the seller may contribute up to 6% of the closings
This type of loan is not assumable.
Penalty: Not applicable.
Reserves: The borrower is required to have a minimum of
one month cash reserves in the bank by the close of escrow.
Funds: Gifts are allowed from a relative, church, municipaility,
or a non-profit organization.
Scoring: Generally Fannie Mae and Freddie Mac require
a minimum credit score of 620.
(Non-Occupant Co-Borrowers): Not allowed.
Ratios: Fannie Mae and Freddie Mac limit a borrower's
monthly payment not to exceed 28% of their gross monthly income.
A borrower's total debt (proposed monthly payment plus monthly
payments towards credit cards, student loans, car payments,
and other installment and revolving credit) cannot exceed
36% of their gross monthly income. If compensating factors
are present or if the borrower has an above average credit
score, the stated ratios may be exceeded.
Insurance: Required for all purchases with a down payment
less than 20% of the purchase price.