Could Lending Changes Make Funds Available? Please!

Real Estate Broker/Owner with Let's Move Austin 618147

Homeowners and Investors previously frozen out are finally recognized as "Key" to the recovery!

Help for hundreds of homeowners and investors frustrated by the credit freeze is finally here. Dropping home values and strict income restrictions have locked many homeowners into high monthly mortgage payments. Too often, it has been heart breaking trying to explain to clients why they did not qualify to benefit from the lower rates.


Fannie Mae, the largest purchaser of home loans in America, rolled out a program that will allow homeowners to take advantage of the lower rates without appraisals, using reduced documentation for borrower income. This program is called a "streamline refinance".  Many of the federal programs previously designed to help homeowners have had little practical benefit. I believe the new changes, combined with the proposed $15,000 tax credit for all new buyers, will go a long way towards helping people get out from under adjustable rate, interest only, and high rate fixed payment loans.  To qualify for the"streamline refinance" the current loan must be held by FNMA and must have been at or below an 80% loan to value. Even if property values have fallen since the original loan was made, a refinance under this new program is available.


There is more big news for the investment community. Fannie Mae said that the "streamline refinance is available for investors as well. The release also acknowledged that "experienced investors are key" to the recovery of the housing market and stated that they are "committed to providing financing opportunities for high credit quality, bona fide investors." The previous restrictions placed on this segment of the market virtually shut down access to financing, further depressing prices and adding to the housing slump.

The easing of guidelines will allow seasoned investors, including those who have 5-10 financed properties, to qualify for loans. Down payment and reserve requirements remain strict and only those with credit scores over 720 will be eligible but, it creates financing options for qualified and experienced investors who previously could not obtain a new loan at all.

With homeowners able to reduce monthly payments, investors able to re-enter the market, and the increased incentives for home buyers, is Spring is finally here? If you have questions please contact me.  Special thanks to Karen Orr at

Posted by

Theresa Bastian

Broker/Owner of Let's Move Austin



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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Kate; Perhaps. Being a lender, it's a mixed bag. Yes, they're trying to free up money. But it's to people who have stellar credit, assets, low loan-to-values. Not that this is a bad thing but money was always available to these borrowers. When they widen the lending guidelines (within reason, of course) is when the market will start to boom again. I expect that to start happening next year. Keep your fingers crossed!

Mar 23, 2009 02:50 AM #1
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