Early adopter calls HomeReady a boon to community reinvestment

March 13, 2017 | By

(This article was updated in June 2017 to reflect changes to HomeReady mortgage)

Congress created Fannie Mae in 1938 to ensure a reliable, steady source of funding for housing – all the time and in all markets. In keeping with that mission, Fannie Mae offers HomeReady® mortgage. This affordable lending product makes homeownership a reality for even more Americans.

Lenders such as TD Bank have readily embraced the product. They report that – out of the gate – HomeReady has been a boon to their community lending. “Since we launched HomeReady in September 2016, it has been a success,” says Sheila Hatfield, a vice president and loan structuring specialists at TD Bank. The lender offers mortgage loans along the East Coast – from Maine to Florida.

“Our volume is greater than we initially anticipated,” says Hatfield. “TD Bank was very excited to have sales offer this new product. And we had customers lined up to apply as soon as we launched.”

Mattress Money Allowed

William Diouf, a manager for Fannie Mae Single-Family, says HomeReady allows borrowers to use “mattress money” or “cash-on-hand” for the down payment or closing costs.

Cash-on-hand literally means money that the borrower has saved but has not deposited in an account at a financial institution, he says. Most likely, the borrower hasn’t had a banking relationship. The HomeReady borrower can use these funds when they have deposited them in a new account or put them in escrow with the title company for at least 30 days.

Before HomeReady, Right Step was TD Bank’s affordable lending product. Hatfield says this product has some of the features of HomeReady – but not all of them.

“Right Step has been a good product for TD. But we felt there was another level of borrower we weren’t reaching. And HomeReady helps us reach those borrowers,” she says. “At TD, investing in the communities we serve is core to our purpose. We are proud to offer this product to our customers.”

Customized Training

Fannie Mae launched HomeReady in December 2015. Since then, according to Litzenberg, it has used live webinars to provide HomeReady training to more than 7,000 individuals in its lender partner organizations. In addition, there is an eLearning course – running about an hour – available on the web.

Diouf  developed the training for loan officers. He says 85 percent of the training sessions are lender-specific. And that enables him to tailor the training to a lender’s individual needs.

“Customized training gives us the opportunity to hear from the loan officers about what’s complicated, what needs more explanation, and how to simplify the product,” says Diouf. “We then provide feedback to the product team. They have been extremely responsive to ideas for making the product easier to understand and easier to use.”

Beyond the specialized training, TD Bank’s Hatfield recommends the HomeReady page.

For lenders who are new to the product, “there’s a vast amount of information on the Fannie Mae website,” she says. “The details of the product are very clear. There are many helpful tools – as well as FAQs based on feedback from lenders.” The site provides “really all the information and tools necessary to successfully implement HomeReady.”

 

JB King is a strategic communications leader specializing in financial services content marketing and thought leadership. She can be reached via email or Twitter.

 

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