Getting approved for a conforming home loan just got tougher. Again. As home loan defaults mount, government-sponsored financier Fannie Mae has imposed new guidelines on what it will lend and to whom, highlighting the need for a strong credit profile and a downpayment. Some of the new restrictions on home buyers include:

• 580 minimum credit score requirement on all home loans (which 85% of Americans have)
• No more than one instance of a 60-day late payment on a mortgage in the last 12 months
• 5-year moratorium on new mortgage credit with a prior foreclosure on record

In other words, Fannie Mae is outright declining mortgage applicants whose credit is weak and whose payment history shows signs of trouble. But, it's not just the "fringe" borrowers that are finding it harder to get a mortgage. Buyers with strong credit profiles are being hit by new changes, too. One such change says that owners of second homes must now have a 10 percent equity position in their homes; 15 percent if the property is in a "declining market". This is up from 5 and 10 percent, respectively, and represents a growing trend to make homeowners have a "stake" in their own homes. Downpayment requirements are higher for all mortgage products, in general. Fannie Mae's changes are the third set of restrictions imposed since December 2007 and more tightening is expected over the next few months. That makes now a compelling time to buy a home -- borrowing money will be more restrictive (and more costly) later. If you are actively shopping for homes and have not been pre-qualified in the last few weeks, reach out to your loan officer and get checked against the latest set of mortgage guidelines. It's better to know today than after you make an offer. (Image courtesy: myFico.com)