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MyCommunityMortgage and FHA Mortgage Program Comparison

MyCommunityMortgage and FHA Mortgage Program Comparison

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

The MyCommunityMortgage Program is similar to the FHA Mortgage Program, which is a government-backed program that enables low-income individuals and individuals with limited funds to obtain mortgages and purchase homes with a down payment as low as 3.5% of the property purchase price

The MyCommunityMortgage Program and FHA Mortgage Program have several similarities, including the following:

There are also several differences between the MyCommunityMortgage Program and the FHA Mortgage Program, including the following:

Although the interest rate on a MyCommunityMortgage loan is typically higher than the interest rate on an FHA mortgage, the FHA Program requires borrowers to pay an up-front and ongoing FHA Mortgage Insurance Premium (MIP) which is typically more expensive than the ongoing private mortgage insurance (PMI) that a borrower is required to pay with the MyCommunityMortgage Program

The example in the table below compares a MyCommunityMortgage with an FHA Mortgage

MyCommunityMortgage and FHA Mortgage Program Comparison
FHA Mortgage
FannieMae MyCommunityMortgage
Credit Score
=>580
680
Minimum Down Payment
3.5%
3.0%
Loan Amount
$200,000
$200,000
Interest Rate
3.750%
4.250%
Up-front Mortgage Insurance Premium (MIP) (%)
1.75%
Not Required
Up-front Mortgage Insurance Premium (MIP) ($)
$3,500
Not Required
Total Loan Amount ($)
$203,500
$200,000
Ongoing Monthly Mortgage Insurance Rate (%)
.85%
.80%
Ongoing Monthly Mortgage Insurance ($)
$144
$133
Monthly Mortgage Payment (Principal & Interest)
$942
$989
Total Monthly Payment (Principal, Interest & Mortgage Insurance)
$1,086
$1,122
Difference
$36
%
Current FHA Mortgage Rates in Ashburn, Virginia as of November 29, 2020
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%

Data provided by Brown Bag Marketing, Inc. Payments do not include amounts for taxes and insurance premiums. Read through our lender table disclaimer for more on rates and product details.

Related FREEandCLEAR Resources

Sources

"Buying a Home."  Federal Housing Administration.  U.S. Department of Housing and Urban Development, 2020.  Web.

"Mortgage Products."  Originating & Underwriting.  Fannie Mae, 2019.  Web.

About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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