An article from the Arizona Republic reports that lending Fannie Mae is doing away with higher minimum down-payment requirements for borrowers in parts of the U.S. where home prices are dropping. The government-sponsored mortgage finance company said it will require minimum down payments of between 3 percent and 5 percent for all loans it guarantees. That replaces a December rule requiring a higher minimum if the loan was for a home in a ZIP code with declining real-estate prices.
When Fannie Mae tagged metro Phoenix a declining housing market in January, the residential market suffered. Dozens of home sales fell through because borrowers couldn't come up with the extra cash required for a down payment, and the status of buying in a declining market spooked some potential buyers. Housing-market watchers say Fannie's move Friday should help ease the credit crunch, and that will translate into more Valley home sales.
See http://www.azcentral.com/arizonarepublic/business/articles/0517biz-fanniemae0517.html for more information.
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