Further, MyCommunityMortgage offers 100-percent financing with a $500 contribution needed from borrowers for a one-unit property. Based on lender feedback, Fannie Mae has added a 5/1 ARM option, acceptance of cash on-hand as an allowable source of funds for down payment and closing costs, and acceptance of subordinate financing, such as 80/20 loans.

MyCommunityMortgage also offers additional new features for loans processed through Fannie Mae's automated-underwriting system, Desktop Underwriter.

Special flexibilities offered with MyCommunityMortgage include:

• Nontraditional income and savings sources (e.g., boarder income, Section 8 income, cash on-hand);
• Nontraditional credit;
• Income flexibility for public-safety, education and health-care employees;
• Affordable options for two- to four-family dwellings;
• Extra flexibilities for disabled homebuyers or for borrowers living with disabled family members;
• Transit-related and energy-efficiency allowances;
• Underwriting through Desktop Underwriter or manual underwriting; and
• Special rehabilitation loan terms with Fannie Mae's Community Renovation loans.

MyCommunityMortgage is available to borrowers who earn at or below the area median income or 115 percent of area median income in nonmetropolitan areas, with additional flexibility in high-cost areas. There are no borrower-income limits for properties in designated underserved areas, including low- to moderate-income census tracts, tribal trust or restricted lands and other areas.

Streamlining condo approvals

Just as Fannie Mae developed MyCommunityMortgage to address homeownership trends, it also has adjusted its condominium guidelines to reflect condos' popularity and demographic changes.

According to the National Association of Realtors, sales of existing condominiums and cooperatives hit a record high for the ninth-consecutive year in 2004. This underscores the significance of condo sales in the housing market overall, says David Lereah, the association's chief economist. In addition, developers have started construction on about 802,000 condo units in the past five years, according to the Census, and more are on the way.

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