Good news for first-time (read: marginal) and condo buyers: Fannie Mae is making it easier for you. No more need to come up with that difficult $500 deposit. And condos will now be treated with the same underwriting respect given to SFH:
Fannie Moves to Placate Lenders
Fannie Mae is planning a number of changes to its My Community Mortgage suite of loans in an effort to reach deeper into the first-time buyer market — and placate lenders. As outlined in a fast-paced session Tuesday at the Mortgage Bankers Association’s National Secondary Market Conference in Chicago, the company is going to waive the minimum $500 borrower contribution required of borrowers who are purchasing single-family houses, allow for 2-1 buydowns, and add a 40-year, fully amortizing term as an option. The company also is planning a change in the way its automated underwriting system, Desktop Underwriter, looks at condominiums, according to Jeanne Hunter, director of product development at Fannie Mae. Another change “targeted for this summer” is a more streamlined pricing system. The new “much more simplified” system will replace one that is now “too complicated,” said Ms. Hunter, who told a conference session that the pending improvements are a result of customer feedback. Lenders have been particularly vocal about their belief that DU penalizes condos, so the next release will treat condos the same as single-family detached units, which should result in more favorable underwriting decisions, she said. Fannie Mae can be found online at http://www.fanniemae.com.
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