[NEWS] Freddie & Fannie to Offer Mortgages Requiring Only 3% Down Payment
recently reported that the "3% down payment mortgage" is making a comeback!
"In an effort to open up lending to more low-income and first time home buyers, Fannie Mae and Freddie Mac announced Monday that they will start backing mortgages with down payments of as little as 3% of the home's price."(Source CNNMoney)
Before you get too excited - it's important to realize that borrowers will need to meet strict guidelines to qualify.
These new loans will require borrowers to:
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- Buy private mortgage insurance
- Have a credit score of 620+
- Provide complete documentation of income, assets and job status
- Complete home ownership counseling
When will this program begin?
- Fannie Mae will start backing loans as soon as December 13th, 2014
- Freddie Mac will start backing loans starting March 23, 2015
Remember these programs are for fixed-rate loans for first time homebuyers and borrowers seeking to refinance their current mortgage.
Who will this impact?
According to CNN Money, Fannie and Freddie already back mortgages with as low as 5% down and the Federal Housing Administration insures 3.5% loans. These lower down payment programs should expand access to credit for first time homebuyers who are typically younger buyers who have not have had enough time to save a large amount of money.
Remember that your financial picture is unique and it's imperative that you speak with your trusted mortgage professional about your options.
Read the entire article from CNN Money Here »
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