In an attempt to help both the housing crisis and the economic recovery, a new Fannie Mae policy may offer hope to struggling homeowners. Those who are currently unable to make their monthly payments can offer a “deed-in-lieu” of foreclosure or “short sale” of their property and may be able to qualify for a home loan much sooner than allowed under previous underwriting guidelines.
In an announcement released earlier this month, Fannie Mae described the new rules which will take effect on July 1 and will allow many to return to homeownership within two years. Although the changes are significant, they do come with limitations. Homeowners will be required to post a 20% down payment and must demonstrate an improved credit rating that meets Fannie Mae’s underwriting standards. However, those homeowners who can prove that their mortgage problems were a result of extenuating circumstances such as job loss, divorce, or unusual medical expenses may receive an exemption and only be required to post a down payment of 10%.
The Fannie Mae “Selling Guide,” expected to be released on April 30 will include the new rules and the policies for extenuating circumstances. While the rules at Freddie Mac and FHA require a longer waiting period prior to eligibility to repurchase, FHA has indicated that it is considering making changes. To view the complete Fannie Mae rule changes, click HERE.
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