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…
