The market has been searching for some good news and today received some great news from Fannie Mae that should provide an immediate boost to the housing markets. Several months ago Fannie Mae introduced a declining market policy that required lenders to lower the qualifying loan amount for borrowers if their zip code was identified as a declining market. This step was taken after the home was appraised as a way to further mitigate Fannie Mae's potential risk. In some areas this had the potential to be as high as 15% which could easily disqualify a home owner from refinancing their mortgage. This change will be beneficial for both refinancing and purchase loan seekers. In addition, Fannie Mae announced they will again purchase loans with as little as 3% equity. If a borrower is able to qualify for a mortgage through their automated underwriting loan engine then they would be able to put down the minimal 3% down. If they are not able to qualify in this manner they can apply for a manually underwritten loan with as little as 5% down. The summer home buying season is about to get under way and this is great news for home buyers and sellers who have seen the real estate market lending options become greatly reduced in the past six months.

5-17-2008©LowRateMortgage.com

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