Breaking News: Fannie and Freddie formally announce 3% Down Programs

Yesterday, HousingWire reported that both Fannie Mae and Freddie Mac formally announced their 3% down options on home purchases. Fannie Mae’s plan will be effective December 13, 2014 while the Freddie Mac plan will be available March 23, 2015. The HW article quotes FHFA Director Mel Watt:

“The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3% down. These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices.”

This is great news to millions of purchasers that have been denied the opportunity to own their own home because of the almost impossible burden of saving for a 20% down payment.

Will these programs create future challenges?

Certain pundits fear that low down payment programs will create a wave of foreclosures down the road. Mr. Watt also addressed this concern:

“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans.”

We also recently addressed this issue.

Here are the direct links to the guidelines for each program:

Fannie Mae 3% Down Program

Freddie Mac 3% Down Program

Remember, as with any new program, there will be some confusion as it is unveiled. Contact mel for a deeper understanding. 

Harvard’s 5 Financial Reasons to Buy a Home

 

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. Last year, he released a paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

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Happy Veterans Day

"It is the soldier, not the reporter, Who has given us freedom of the press.

It is the soldier, not the poet, Who has given us freedom of speech.

It is the soldier, not the organizer, Who gave us the freedom to demonstrate

It is the soldier, Who salutes the flag, Who serves beneath the flag.

And whose coffin is draped by the flag, Who allows the protester to burn the flag."

- Father Dennis Edward O'Brien, USMC

 

To all the Veterans that have put your lives on the line, I can read and write in English because of you - thank you and God Bless.

 

 
 
 

4 Reasons to Buy Before Winter

It's that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don't have to look much farther to find four great reasons to consider buying a home now, instead of waiting.

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