Last week, Fannie Mae and Freddie Mac – government-backed agencies that finance a large portion of mortgages in America — detailed plans to back mortgages with down payments as low as 3%. The move is designed to make homeownership accessible for more people, including potential homebuyers who may have been shut out of the market by the stricter standards put in place after the 2008 financial crisis.
The agencies say the new programs contain safeguards that protect against abuses that led to the subprime housing market crash. The loans would be allowed only for fixed-rate mortgages on single-family homes that would be the borrower’s primary residence and would require full documentation of the buyer’s ability to repay the mortgage.
Officials from the agencies say the new programs are designed to help credit-worthy borrowers buy a home — particularly those with low or moderate incomes who can demonstrate the ability to repay a mortgage. For many people the larger down-payment requirements have been an obstacle to buying homes that they could otherwise afford. Unlike programs in the past that have been available only to first time homebuyers, this lower down-payment requirement will be available to anyone purchasing a single-family private residence.
If you’ve been thinking of buying a home but have been holding back because you’ve been uncertain if you could qualify for a mortgage, now may be a good time to investigate your options. See your banker or contact us. We’ll walk you through all of your options and get you on the road to that home you’ve always wanted.