» Fannie Mae News - Down Payment Requirements Relaxed » Posted by Realestator      

Fannie Mae in the News today, announcing a new national policy on relaxing down payment requirements for conventional mortgages. Reversing their previous requirements that were implemented in December of 2007, now they will consider lending to borrowers with as little as 3-5% down payments.

This reversal in policy is part of their “Keys to Recovery” program. Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said, “This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover.”

This Fannie Mae news is not going to help investors, however, since this policy will only apply to owner occupied applications. Still, real estate investors should take this relaxing of down payment requirements as a sign that already lenders are beginning to make purchasing homes easier in an attempt to help the devastated real estate market recover.

Don’t be surprised if soon Freddie Mac and other prominent lenders follow. Considering Freddie Mac’s recent policy of restricting individuals from obtaining more than four mortgages (it used to be ten!), we may see that policy reversed as well in the near future.

While I adamantly believe that it will be real estate investors who will help the housing market recover and not primary home owners, any relaxing of restrictions from lenders will eventually make it more feasible for everyone to buy if they should decide to do so. Whether anyone has learned from the recent lesssons that have been revealed to all of us lately in the sub-prime mortgage mess is yet to be seen. But any savvy investor can benefit from policies that make it easier to buy - it may only apply to primary owners now, but eventually, it will be passed on to all types of purchasers.

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» Posted in Real Estate News on May 18, 2008.

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