Changes to the gift rules for Fannie Mae. The minimum downpayment for a conforming Fannie Mae loan is 5%. Previously this 5% had to be from the client and they could have additional money gifted for a larger down payment.
Under Fannie Mae's new lending guidelines, now in effect, securing a mortgage is easier for some borrowers and more difficult for others. These new rules will allow buyers to use gifts and grants from nonprofit groups for their minimum 5 percent down payment. Freddie Mac is also considering a similar change but has not rolled anything new out yet.
These new rules are "definitely going to help upgrade buyers and young couples who for whatever reason don't have enough money and are getting some needed cash from their families," said Edward Ades, owner of Universal Mortgage. With the economic times as they are - I will take a wait and see on whether there will be a true benefit but it does open some doors. If the parents or a family member of the buyer is in a postion to gift money - it does make the process less costly to the buyer. Just remember to follow the traditional documentation requirements with verifying and sourcing the money.
The new gift rules apply only to purchases of single family primary residences and cover conforming mortgages submitted to Fannie Mae. There is also an article in the Daily Real Estate News about this change.
For the right client, this change coupled with the first time home buyer credit available for qualified NC buyers - this could be a great opportunity for some new home sales!
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