Fannie Mae Drops Extra Down Payment Policy for Declining Markets
Posted May 16, 2008 @ 3:38 pm, Viewed by 1473 Visitors, Read 1487 Times.Fannie Mae announced today it will be scrapping its extra 5% down payment requirement for properties identified as being located in a declining market. The change will affect conventional, conforming mortgages that the company will purchase or guarantee and is an additional part of the company's recent Keys to Recovery initiative.
The company had been under pressure from both Realtors® and industry insiders alike since it adopted the policy in December, 2007. Marianne Sullivan, one of Fannie Mae's senior vice presidents 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."
The new policy will take effect June 1, when the secondary mortgage market giant will once again allow borrowers to obtain loans with up to a 97% loan-to-value. The change was heralded by NAR's president Dick Gaylord as an important step because the original policy "stigmatized communities with lower sales and prices."
The move comes on the heels of the first "Keys to Recovery" initiative that included Fannie Mae's commitment to streamline refinancing for borrowers whose mortgage balances exceed their home's value and to improve jumbo-conforming mortgage pricing to further help borrowers in high cost areas.
Together, these two parts of Fannie Mae's new initiative are the first logical steps we've seen in quite a while to try to and help bring some sanity back into the ailing mortgage lending market.
Metro Mortgage Company is a federally regulated Mortgage Banker specializing in Conventional, Jumbo and FHA/VA mortgage loans throughout Florida. Call us today at 888-617-3674
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Gulf Coast Associates is a private real estate firm specializing in SW Florida Real Estate. Benjamin Dona is the Broker-Owner. He and his wife Terry, an underwriter with 20 years experience, also own a federally-regulated mortgage banking firm, Metro Mortgage Company.
Originally from Saint Louis, Missouri we've lived and worked from our base in Bonita Springs since 1997. Read More
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