Ready to purchase your own home, but having trouble saving up a 20% down payment? Here’s some news that may make your dream a little more accessible: Fannie Mae and Freddie Mac are now offering qualified borrowers the option of down payments as low as 3%.
This option is available to aspiring homeowners who have good credit and can afford their monthly mortgage payments. In other words, the 3% option will benefit people who are financially stable (and not likely to default on their mortgage in the future), but don’t have the large sums to cover a large down payment on top of all home closing costs.
Mel Watt, the director of the Federal Housing Finance Agency, believes this new option benefits borrowers while still being financially sustainable for the lending agencies:
“These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices. … In addition, the new offerings will also include homeownership counseling, which improves borrower performance.”
Fannie Mae’s plan is already in effect, and Freddie Mac‘s will begin in March of 2015.
Wondering if you qualify for these plans? Talk to your mortgage expert. Or, if you don’t currently have a mortgage professional on your side, give us a call and we’ll be happy to put you in touch with the great mortgage team we work with.