3% Down Conventional is Coming!
First, some good news. Fannie Mae announced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee. Starting June 1, 2008, Fannie Mae will accept up to 97% LTV ratios for conventional, conforming mortgages processed through DU, and 95% LTV ratios for loans underwritten outside of DU, in all geographic locations in the United States.<br /><br />“The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences.<br />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.<br /><br />‘We are able to adopt this new, national down payment requirement, even in markets where home prices are declining, because our new automated underwriting risk assessment model DU Version 7.0 will limit risk layering and assess each loan more precisely.””