3% down conventional loans!

Fannie Mae released new program guidelines over the last week.  Freddie Mac is following along to some extent.  The big announcement from Fannie is a 97% program!  Until late last year, Fannie Mae had a 3% down program but it was discontinued.  This new program will allow for purchases and refinances.

Fannie Mae will allow My Community mortgage purchase transactions if at least one borrower is a first time homebuyer and pre-purchase homebuyer education is completed.  The My Community program allows for lower mortgage insurance rates. It will also allow for reserves to come from gifts from a family member.  My Community program does have income limits. 

The 97% program will allow people to buy or refinance their home.  This program also requires at least one home buyer to be a first time homebuyer.  You will also be able to refinance existing Fannie Mae loans.  This may help those that have mortgages that were not eligible for HARP refinances.  The standard 97 program will not require homebuyer education but will have higher mortgage insurance.

Both Fannie Mae and Freddie Mac have said that the primary barrier to home ownership is saving money for the down payment and they are hoping these programs will help that.  There will be updates to this program as lenders start to roll it out.  The updates are being done to the underwriting system the weekend of December 13, 2014.  Many investors have not updated their underwriting guides to accept these new programs, but I expect we will see that soon.  There may be some overlays by different investors – possiblyt credit score requirements, etc.

The good news with this program is that it will help borrowers that have good credit but limited funds to get a new home!  Any questions on the program, please contact me or your loan officer!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, NMLS#150953 – EmailWebsite

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Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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