It is official! Both government-sponsored enterprises Fannie Mae and Freddie Mac announced their individual 97% loan-to-value products, in the government’s latest attempt to expand the credit eligibility for first-time homeowners.
Back in October, the Federal Housing Finance Agency announced a number of policy steps aimed at increasing mortgage credit availability
These new lending guidelines were released today by Fannie Mae and Freddie Mac and will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with only 3% down.
Fannie’s My Community Mortgage product with a 3% down payment will be available now through desktop under writing tool starting the weekend of December 13, 2014. Fannie defines a first-time buyer as someone who hasn’t had primary residence in the last three years.
Fannie Mae and Freddie Mac’ underwriting systems includes as well compensating factors to evaluate a borrower’s creditworthiness who can afford a house payment.
These products come at the right time as top housing economists predict 2015 to be a significant year for the housing market.