As of September 2007 - Fannie Mae began offering a mortgage loan program that may help many people currently facing foreclosure. The program is available to consumers through many of the nation's largest lenders and it offers reasonably priced loans even to those with bad credit scores. There is only one problem with it. Most loan officers don't know about it or how to use it. This means that anyone wanting to take advantage of the program needs to be educated prior to shopping for their loan.

The program is called My Community and not everyone can qualify for it. But many people who can qualify are simply not being told about it.

The My Community program is setup to provide mortgages to underserved market segments. These segments are predominantly geographical in nature, but they also include various groups of people.

Lenders and brokers can find out if someone qualifies for a My Community loan by going to eFannieMae.com; a website setup for those offering consumer home loans. There, they will find a program (called a geocoder) that allows them to enter a variety of information about the borrower and the property they want to place the loan on. If the property is in an underserved area, and the borrower doesn't make too much money, they can apply for a My Community loan.

It is important to note that those who live in the path of Hurricane Katrina also qualify even if their area is not listed in the geocoder.

As previously mentioned, geography is not the only criteria to qualify for one of these loans. People who are permanently disabled can apply. Healthcare workers, those with jobs in public service including police and fire department personnel, active duty military personnel and those who have separated from active duty within the past two years may also qualify.

The My Community loan program offers borrowers a variety of attractive features. These include 30 year fixed rate loans as well as loans with introductory fixed rate periods of up to seven years. The program also includes financing of up to 100% of the property value for single family residences and up to 97% financing for loans on two to four unit properties.

Just because a consumer has a poor credit score doesn't mean that they can't get one of these loans. Fannie Mae is telling lenders involved in the program to work with borrowers to develop alternative credit profiles where needs be. For instance, if someone who has become disabled that show the lender that their credit issues are a direct result of medical bills resulting from their disability, there is a very good chance that the borrower will qualify for a loan, even with a credit score of 600 or less.

Any consumer who is thinking about refinancing their existing home, or purchasing a new one, needs to ask their lender about My Community. This is especially true if a broker or lender is attempting to put them into a loan with an interest rate of higher than 7%. If the loan officer isn't aware of the program, ask him to do some investigation. If the lender doesn't participate in the program, then get a second loan quote from another lender prior to signing up for a loan.

by Jim Malmberg

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