In a move to assist Boston North Shore mortgage borrowers, the Federal National Mortgage Association (Fannie Mae) announced it will make substantial changes in a lending program for low-to-moderate-income households. The program, dubbed HomeReady, is scheduled to begin in December. It promises to feature new lending guidelines recognizing that many of Boston North Shore mortgage customers share homes and the accompanying financial responsibilities with their extended family. This is especially true in Hispanic and African American households.

The Boston North Shore mortgage market will see changes thanks to a Fannie Mae loan program for lower-income households.

New Rules in the Boston North Shore Mortgage Game

Under the new guidelines, Boston North Shore mortgage lenders will be required to include income from non-borrowers living in the same household as the primary borrower. Fannie Mae officials say this income has been proven to the stable over time and contributes greatly to the household and, therefore, the monthly mortgage payments.

Boston North Shore mortgage borrowers may also be allowed to count income from co-borrowers that are not occupants, such as parents or in-laws. As is the case with a number of other mortgage products, the down payment can be as low as 3%. And, closing fees and PMI will also be less than on other loans.

Fannie Mae expects the new program to assist homeowners who suffered losses when home values dropped during the most recent housing crisis. In addition, the new guidelines are designed to assist first-time buyers entering the home market. The new program carries no set income requirements for Boston North Shore mortgage borrowers buying in federally identified low-income census tracts. To qualify, homebuyers in those census tracts cannot earn more than the area’s median income. Income for homebuyers in other census areas cannot exceed 80% of that area’s median income.

The program requires borrowers to enroll and finish an online educational course on homeownership. In addition, borrowers will receive information on counselors in their area specializing in housing advice in the event they have financial trouble in the future.

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It remains to be seen how many Boston North Shore mortgage lenders will offer the HomeReady program. Industry experts say the new program could spur some renters into becoming homeowners. Recent statistics released from show that on average a renter spends slightly more than 30% of monthly income on rent. The average homeowner spends half that number, 15.1% on a mortgage payment.

While it’s not clear how many lenders will offer the program, HomeReady could offer an opportunity for some households burdened by high rents to get into homeownership. A recent report from Zillow found that the average renter now spends 30.2 percent of his or her monthly income on rent, compared with an average of 15.1 percent for homeowners with a mortgage. In high-cost metro areas, the rental burden rises to as high as 40 percent.

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