“Keys to Recovery” - The Revision to Fannie Mae’s Down Payment Policy
May 19th, 2008 Categories: Buying, Keller Williams
Beginning June 1st, Fannie Mae will implement a revised National Down Payment Policy (to replace the “Declining Market” initiative implemented in December 2007). According to the policy, Fannie Mae will begin accepting up to 97% Loan-To-Value (LTV) ratios for Conventional, Conforming mortgages processed through its automated underwriting system, and 95% LTV ratios for loans underwritten outside of this system - for ALL geographic locations in the US. The former policy was based on local real estate market conditions. The new policy affects single-family homes used as primary residences, other investments will have varying policies.
The change comes after months of meetings from the National Association of Realtors (NAR), who claimed the former policy was discouraging potential homeowners from entering markets that were once labeled in a “declining market.” The “Keys to Recovery” initiative will hopefully help “to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover,” says Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management. For the complete Fannie Mae press release, click here.
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