To help expand access to mortgage credit, Fannie Mae and Freddie Mac are introducing loan options for first-time homebuyers that will permit loans with as little as a 3 percent down payment.
Fannie Mae and Freddie Mac are providing multiple options to help lenders serve credit-worthy borrowers.
“In support of ongoing efforts to expand access to credit and support sustainable homeownership, Fannie Mae will offer up to 97 percent loan-to- value financing to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment, and to support refinance of existing Fannie Mae mortgage loans,” Fannie Mae said.
This means that a first-time buyer would need as little as $10,484 to purchase a median-priced home in Durango of $349,450. The first-time home buyer would need as little as a $7,470 down payment to purchase a median-priced home of $249,000 in Bayfield.
Only fixed-rate loans with terms up to 30 years are eligible. The home must be the primary residence. At least one of the borrowers should be a first-time homebuyer (only for Fannie Mae), while Freddie Mac stipulates that borrowers must not have any ownership interest in any other home. Manufactured housing is not an acceptable property type.
The first-time homebuyer must take homeowner education classes to qualify.
Karen Iverson, executive director of the Regional Housing Alliance, stated that the alliance is a state -ertified homebuyer education provider, and it has endorsed the national homebuyer education standards.
Deputy Director Pam Moore said RHA was just awarded $300,000 from the Division of Housing for down payment assistance next year. This will allow RHA to provide “approved” community second loans along with the Fannie Mae and Freddie Mac first mortgage to further lower the costs of borrowing and keep a buyer’s overall transaction more affordable.
Regional Housing Alliance of La Plata County can be reached at 259-1418 or www.rhalpc.org for more information.
To sum things up, the new loans largely are geared toward the first-time buyer, although a no-cash-out refinance option exists as well for existing Fannie Mae loans.
It is likely a borrower with better credit would most often choose a Fannie Mae or Freddie Mac loan over an FHA loan, given the substantial savings in monthly mortgage payments.
Mike and Judy Malone are Vice Presidents/Loan Officers (NMLS 449954/449953) at Heartland Mortgage in Durango. They can be reached at mmalone@heartland-bank.com; jmalone@heartland-bank.com or 375-2265.
