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At a time when housing prices have begun to rebound and interest rates have increased from historic lows, Utah Housing Corporation has launched a new mortgage option to assist low- to-moderate income homebuyers by providing a product not available anywhere else. The Utah Housing No Mortgage Insurance (NoMI) Loan enables a homebuyer to achieve significantly lower monthly payments when compared to other 30-year fixed rate loan products.
Because there is no monthly mortgage insurance premium, although the interest rate is higher, the total monthly payment is lower. For example, compared to a standard FHA-insured mortgage with a $150,000 loan amount and an interest rate that is 1 percent below the NoMI interest rate, the monthly payment for a NoMI loan would be $80-$100 less, providing greater affordability or an additional $15,000-$20,000 in purchasing power. A down payment assistance loan (also a 30 year fixed rate) can also be obtained with the NoMI mortgage for up to 4 percent of the first mortgage amount.
“Utah Housing is eager to provide the NoMI loan product because it offers the lowest monthly mortgage payment available to Utah’s low and moderate income home buyers,” said Grant S. Whitaker, president and CEO of Utah Housing. “The extra layer of risk Utah Housing takes on with the NoMI loan is offset with higher credit score requirements, higher interest rate and tighter loan underwriting.”
The NoMI Loan is available to home buyers with credit scores of at least 700 and is not limited to first-time home buyers. As with all Utah Housing loan programs, income and purchase price limits exist for the NoMI loan and can be found on Utah Housing’s website at to www.utahhousingcorp.org and selecting “homebuyer” and then “loan programs.”