Fannie Mae and Freddie Mac on Monday spelled out the terms under which they will accept mortgages with down payments of as low as 3 percent from first-time buyers, but it may take time to see how many lenders will sign on to the initiative.
The change in policy, broadly announced in October, is designed to entice millennials as well as low- and moderate-income consumers, to take the plunge and become homeowners, a move many aren’t taking, either by choice or because of limited financial means. The absence of young, first-time buyers from the market has weighed heavily on the industry’s comeback from the housing crisis.
As of September, the nation’s homeowership rate had sunk to a 19-year low of 64.4 percent.
The policy shift also will open another avenue to homeownership to consumers who may have considered a Federal Housing Administration-backed loan but were dissuaded by the higher upfront fees and monthly insurance premiums now attached to that loan product…Please click here to read Mary Ellen Podmolik’s story in the Tribune.