2015 has some new mortgage financing options in store. Fannie Mae and Freddie Mac announced they are bringing back 3% downpayment conventional loans. Both have different parameters and starting times.
Fannie Mae’s 3% down loan is available after December 13, 2014. One of the homebuyers must be a first time buyer (not owned a home within 3 years). This program is available under Fannie Mae’s standard and My Community loan program. Fannie Mae also allows for rate/term refinances under this program. These loans are only good for single family, owner occupied properties.
Freddie Mac’s 3% down program won’t be available until March 23, 2015. Freddie Mac is not requiring buyers to be first time buyers and the program is available for rate/term refinances.
Both of these options are not available for construction/permanent financing or on rehab loans. Investment properties and multi unit properties continue to need a larger downpayment. Both of these options are good up to the conforming loan limit of $417,000.
Both of these options are great for buyers with high credit scores, good debt to income ratios, but are low on cash. These are an alternative to FHA loans that require 3.5% down, but have monthly mortgage insurance for the life of the loan. Conventional loans allow for the dropping of monthly mortgage insurance once 22% equity is reached.
Looks like 2015 will have more options for more buyers to jump into the housing market and take advantage of low interest rates!