Low income just got higher! Some of our "low income" home loan programs are now available for borrowers with higher incomes.

The Federal Housing Finance Agency (FHFA) just released updated Area Median Income (AMI) limits for 2023 and 2024. Limits increased an average of 7.73% across 95% of US counties. You can read the full announcement here from Freddie Mac.

This change is expected to open the door to homeownership for more borrowers.

Why did the FHA Make This Update to the Area Median Income (AMI) limits?

The primary objective behind this decision is to foster an environment of increased accessibility to affordable homeownership opportunities for a wider spectrum of individuals. Through the elevation of these limits, a larger segment of the population now stands a chance to meet the eligibility requirements for mortgage programs such as Home Possible® and HomeReady.

How Does This Change Benefit Homebuyers?

• It expands the pool of borrowers who can qualify for programs like Home Possible® and HomeReady.

• Allows more people to achieve their dream of homeownership.

• More affordable financing options

• Flexibility for lenders to accommodate a wider range of income levels.

Several government-sponsored loan programs provide preferable terms for borrowers who earn 80% or even 100% of an area's median income. When that income level increases, more borrowers become eligible. These programs typically offer low down payments and flexible sources of funds (including gifts) for both first-time homebuyers and repeat buyers.

Not only does this change benefit homebuyers, but it also provides significant advantages to the housing market as a whole. How so?

• By expanding the pool of borrowers eligible for affordable mortgage programs, this decision ignites demand and leads to an upsurge in homeownership rates.
• The availability of affordable financing options serves as a catalyst for new home construction, thereby revitalizing the real estate sector and enhancing its overall vitality.

How Do AMI Limits Impact Mortgage Eligibility?

AMI limits play a crucial role in determining mortgage eligibility. They serve as benchmarks for lenders to assess whether a borrower's annual qualifying income meets the requirements of specific mortgage programs. By comparing an applicant's income to the AMI limits applicable to the property's location, lenders can determine eligibility.

Are Area Median Income Limits Updated Frequently?

Typically, AMI limits undergo annual updates to align with shifts in the economic landscape and reflect the latest income trends. The FHFA diligently assesses and revises these limits to ensure they accurately capture the area's current median income levels. It is crucial for prospective borrowers to remain informed about these updates as they directly impact eligibility for different mortgage programs. Staying updated empowers individuals to determine their eligibility and make informed decisions regarding their homeownership journey.

Bottom Line:

If you or someone you love has hesitated to pursue homeownership due to low income, now is an opportune moment to assess your eligibility. When you're ready to take the next step, we encourage you to reach out to us. Our team will assist you in determining whether you qualify for a Fannie Mae or Freddie Mac Loan. Don't miss out on the possibility of fulfilling your homeownership dreams – let us guide you through the process.