Homes just became more affordable for first-time home buyers under new federal lending guidelines that took effect on Saturday, December 13.
Under the new guidelines, creditworthy first-time home buyers will be able to purchase homes with down payments as low as three percent on federally-insured mortgage loans backed by Fannie Mae and Freddie Mac. Previously, Fannie Mae and Freddie Mac required a minimum five percent down payment to qualify for a government-insured loan. This means that first-time home buyers who qualify for a $100,000 loan will only need to raise $3,000 instead of $5,000 cash as a down payment to obtain the loan.
The new guidelines apply to loans up to $417,000 (or $625,500 in expensive housing markets.) For Freddie Mac loans, the borrowers’ income cannot be more than 100% of the median income for the area in which they are buying a home.
If you are a first-time home buyer searching for a home in Chisholm, Cook, Eveleth, Hibbing, Virginia or anywhere in the Iron Range, MN, call Iron Country Realty today. We can help you find the perfect home, connect you with local lenders who will advise you on your mortgage options, and make the home buying process as painless and smooth as possible.
For more information on the new federal mortgage lending guidelines, see:
Mortgage Giants Ease Down Payments for First Time Homebuyers