Fannie Mae has announced a new policy.

Mortgage and Lending with Not yet determined

Although Fannie Mae has written down a bunch of losses, Fannie Mae announced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee. I am so glad they have because this goes to show they are willing to stick their head out and see what happens and what is grabbed, regardless of this economy!! Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through our systems that we use to do automated underwriting (Desktop Underwriter) and 95 percent loan-to-value ratios for loans underwritten outside of Desktop Underwriter, in all geographic locations in the United States. The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining. The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences. Down payment requirements will vary for other occupancy, property and transaction types. The company will implement systems and operational changes over the summer to accommodate the new national policy. I wish it were sooner, but hey, I'll take June 1st too. :) Won't we all? I hope this helps us all breathe again. 3%-5% down payment is not an issue COMPARED to 10%, 15% or 20%. You can't walk into a lease purchase home or an apartment for free, so what makes you think you can walk into a house for free?

This is going to be very helpful, but not the total solution to the problem.


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Matthew Rosov
Amerisave Mortgage Corporation - Laurel, MD
Certified Mortgage Planning Specialist

Yes, this is awesome news.  Wonder how long it will take for lenders to get on board?

May 20, 2008 01:13 AM #1
Artisan Custom Estates
Artisan Custom Estates - Alpharetta, GA

Thanks Jennifer - Definitely a step in the right direction for loosening up the capital market and improving the "feasibility factor" for home purchases for a large sector of the population.

May 20, 2008 10:36 AM #2
John Thomas
Primary Residential Mortgage Inc. - Newark, DE
First Time Home Buyer Expert

But it all may mean nothing if MI companies still won't insure the loan in declinging market area to that LTV.  Fannie Mae allows 100% financing, but you can't get it because the MI companies won't insure those loans.

John Thomas - Certified Mortgage Planner

May 20, 2008 01:35 PM #3
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