Freddie Mac has come out with a new program designed to help more borrowers obtain financing with lower down payments. Since the real estate crash of 2008 Fannie Mae and Freddie Mac have increased their down payment rules. It now looks like it’s starting to soften a bit. Under this new program the borrower only has to contribute 1% down payment which can come from their own funds or a gift. Below are some of the parameters of the program:
- Minimum 700 credit score.
- Maximum debt-to-income ratio of 43%.
- 3% seller concessions for closing cost and pre-paids.
- Program available with or without monthly mortgage insurance.
- Borrower can not make more than 100% of area median income (roughly $77,000 in Albemarle County).
This should help open up the first time buyer market. While FHA has been consistent with the 3.5% down program and Rural Development is available in rural areas with 0% down payment, it is now nice to get Freddie back in the ball game!