More Americans to buy homes with 3 percent down

More Americans to buy homes with 3 percent down

Fannie Mae and FREDDie MAC  has stated that some home buyers will be able to purchase a home with only 3% down. The current miniumm is  5% but 3.5%  down if you are utilizing  an FHA loan.

The companies announced last Monday the new guideline was designed to assist low income and first time home buyers.

The guidelines are designed to prevent the foreclosure fiasco we had in 2007-2009. The borrowers will go thru an underwriting process and must have enough income to repay loans.

Mel Watt, director of the Federal Housing Finance Agency stated the underwriting guidelines will provide a responsible approach to improving access to credit while ensuring safe and sound lending practices,"

. The FHFA oversees Fannie and Freddie, which have been under government control since 2008 because of the housing bust

The new loans would be fixed-rate mortgages of up to 30 years for primary residences.

 Fannie could begin underwriting the loans before the end of the year. It said the loans would be geared toward first-time buyers, require mortgage insurance payments because of the low down payment and mandate that buyers receive complete a financial counseling program.

Fannie and Freddie own or guarantee about half of all U.S. mortgages, worth about $5 trillion. Along with other federal agencies, they back roughly 90 percent of new mortgages.

The two companies don't directly make loans to borrowers. They buy mortgages from lenders, package them as securities, guarantee them against default and sell them to investors. That helps make loans available.

For more infor log unto the FHFA website, Fannie Mae and Freddie MAC.

Thank you,

 

Ainsley Daux

Florida Realty

(813)546-1954

Dover Florida Real Estate