The mortgage giants, Fannie Mae and Freddie Mac, announced that they will start allowing 3% down mortgages!
Even though FHA allows 3.5% down payments on mortgages the PMI (Private Mortgage Insurance) is VERY costly. For a home purchase of $250,000 with 3.5% down the PMI is approximately $230.00 per month. Fannie Mae’s PMI cost is a little over half of that. This results in a savings of about $100 per month.
I am pasting below the guidelines of the changes:
Brief Summary of the Policy Changes
Following is a summary of the policy changes that are more fully described in this Announcement. Fannie Mae
will allow LTV ratios greater than 95% up to a maximum of 97% for:
MyCommunityMortgage® (MCM®) purchase transactions if at least one borrower is a first-time home
buyer and pre-purchase home-buyer education and counseling is completed,
standard purchase transactions (non-MCM) if at least one borrower is a first-time home buyer, or
standard limited cash-out refinances (non-MCM) of existing Fannie Mae loans.
All loans must be fixed-rate and secured by a one-unit principal residence. Manufactured housing is not
permitted. All loans must be underwritten with DU.
In addition, for MCM loans Fannie Mae will now allow reserves to come from gifts.
A link to the complete announcement and guidelines are here.
Contact me about Selling or Buying Your Home in Massachusetts
Bobbie Files is a Real Estate agent at SUCCESS Real Estate, covering the Bristol, Plymouth and Norfolk County areas.