YIKES! Lower Down Payments From FNMA !! Only 3% now possible..

User Forum Topic
Submitted by HLS on May 17, 2008 - 9:36am

The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences.

Down payment requirements will vary for other occupancy, property and transaction types. The company will implement systems and operational changes over the summer to accommodate the new national policy.

http://www.fanniemae.com/newsreleases/20...

‹ In mortgage market, ‘walkaway’ homeowners may be urban myth Local Realtard Mark Mills in yesterday's NY Times ›
FHA has had a 3% down
Submitted by HLS on May 17, 2008 - 9:46am.

FHA has had a 3% down program for awhile. The guidelines to qualify were easy at low credit score (even below 600)
but tougher on income qualifying limits (DTI) and are full doc only...

FNMA has been at 95% LTV (5% down) but needing a higher credit score, usually 620+, but was easier to qualify based on imcome/debts. DTI up to 60% on loans below $417K

A few months ago, pricing became higher for scores below 680, and much higher from 580-620.

Starting in Dec 2007, FNMA had "areas of declining value" based on zip codes, that added 5% instantly. Most of So Cal was affected, so what had been a possibility for a 95% loan was now 90% in declining markets, which is where it's stayed until now....

Without knowing the qualifying factors yet, for a qualifying borrower in a declining market, what would have required 10% down today, will only require 3% down on June 1st as a minimum down.

The details of approvals remain to be seen. It might be that even higher credit scores and lower DTI's are required.
I don't know if the programs will be the same up to $697,500 limit vs $417k limit...

WHAT SAY YE ??

I read about these as well
Submitted by SD Realtor on May 17, 2008 - 10:25am.

I read about these as well HLS. Interesting times huh?

Anyways, I just am on the cusp on a short sale closing where I am the listing agent. This beast is like a dragon that has been taking almost a year to slay but the loan funded on Friday for the buyers and we actually did record at the end of the day. The last step is that the loan servicing company for the sellers wants the certified HUD signed by both parties. Odd...

The sellers did go the 3% down route with the FHA loan. I will be curious to see how the requirements pan out with credit scores, income levels and verification, etc....

Personally I agree with the statement YIKEs... Soon they'll be giving away money on corners again...

SD Realtor

The change was due to
Submitted by Baron von Rothschild on May 17, 2008 - 11:30am.

The change was due to political pressure. Can you say "election year"?

I wonder what happens after November.

Baron, This is not a
Submitted by HLS on May 17, 2008 - 12:27pm.

Baron,
This is not a partisan issue though, this to avoid admitting meltdown...

Admitting that the house of cards built on debt has collapsed and is going to cost tens of billions of dollars to rebuild.

What is at stake is a lot more than FB's having to go rent a place to live.

It's an engineered economic experiment that has blown up like the bomb dropped on Hiroshima.

We've got Fat Man and Little Boy making the decisions,
and Wall Street is the "Manhattan Project"

Perhaps a history lesson is in order....
I'll be the first one to agree that history repeats itself, but not only the positive events repeat like most people want to believe.

If mission is aborted or unsuccessful,
Can you say "DEPRESSION" ??