Fannie and Freddie Finally Stepping Up To the Plate For First Time Home Buyers

Since I started my blog almost 1 year ago (November 1st, 2013 to be exact) I have been calling for Fannie and Freddie to step up to the plate and help out first time home buyers. It looks like they are about to do just that! Director of the Federal Housing Finance Agency, Mel Watt,  is expected to announce this week programs that will allow borrowers to put down as little as 3 percent of the purchase price on loans backed by Fannie Mae and Freddie Mac. Currently the only low down payment loans available are Rural Development and FHA. But RD loans have income and property restrictions and FHA is just downright too expensive. While we don’t know the details of Fannie and Freddie’s new programs it has to be better than FHA. For one it’s 3% down instead of 3.5%. Second, we can assume it will not have the 1.75% up front mortgage insurance that FHA has. Third, there is no way the monthly mortgage insurance will be as expensive as FHA’s 1.35% monthly fee. My prediction is that the monthly fee will be based on credit scores and if a borrower has over 740 scores I’m thinking the mortgage insurance will be around .6%. Just a guess of course. I will keep everyone posted and as soon as the program is out I will have a blog with all the details.

Fannie_opt

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