Mortgage giants Fannie Mae and Freddie Mac announced recently that first-time Vero Beach homebuyers may be seeing a game changer with lower 3 percent down payment requirements. This is designed to expand credit for qualified home shoppers who may have been sidelined the last few years because of higher down-payment requirements.
A recent examination of what's holding back Vero Beach homebuyers argues that the down payment is the biggest challenge for first timers.
These loans will meet Fannie Mae's usual eligibility requirements, including underwriting, income documentation and risk management standards. These loans will require private mortgage insurance or other risk sharing, as is required on purchase loans acquired by the company with greater than 80% LTV.
Any Vero Beach homebuyers can take advantage of Fannie's loans as long as at least one co-borrower is a first-time buyer.
New Option Not Just for Vero Beach Homebuyers
Eligible homeowners who wish to refinance their Fannie Mae-owned mortgage but do not qualify under the Home Affordable Refinance Program can refinance their loan up to the 97% LTV level under a limited cash-out option.
Fannie Mae says it has implemented prudent risk management practices to ensure that loans the company acquires are appropriately underwritten, including mortgages with lower down payments. These include essentially eliminating risk-layering on purchase money loans, requiring income documentation to avoid "low-doc" or "no-doc" lending, and requiring income verification.
Fannie Mae has also worked to provide lenders with greater clarity on what circumstances would result in a loan repurchase request. Some lenders have said that uncertainty around these requests has led to them curtailing mortgage availability. This new clarity is intended to help lenders make mortgages to more creditworthy borrowers.
Similarly, Freddie Mac announced its Home Possible Advantage program, an affordable conforming, conventional mortgage with a 3% down payment to help more first-time Vero Beach homebuyers jump into the market.
Get more information about becoming a Vero Beach homebuyer and news affecting mortgage rates and qualifications in our section on Vero Beach Mortgage Info to your right under Vero Beach Real Estate Categories.
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