Fannie Mae Reduces Downpayment Requirements
Buyers rejoice! In 2007, Fannie Mae had designated Palm Beach County a “declining market” and since late last year was adding an extra 5% to most down payment requirements in our market area.
Fannie Mae changed that policy today:
“As another part of our ‘Keys to RecoveryTM‘ initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions.”
and now a 95% LTV loan is really a 95% LTV loan again (instead of the 90% loan it was yesterday). Buyers in Palm Beach County no longer have to find another 5% (which many don’t have) and we should see an improving market very quickly.
Fannie Mae has tightened up its credit requirements, however, so not as many buyers will qualify. But this should take some of the pressure off FHA, which was becoming the number one go-to lender due to the down payment restrictions. Borrowers with credit issues may still find FHA a better solution.
Tags: down payment, Fannie Mae, Lending, LTV