Posted by: Larry Stevens | November 7, 2014

Update on Fannie Mae’s 97% LTV Loan Product

Real Estate Finance Insights

According to Federal Housing Finance Agency Director Mel Watt, “We know that the size of a down payment – by itself – is not the most reliable indicator of whether a borrower will repay a loan. As a result, the guidelines will require that borrowers have “compensating factors” and risk mitigants – such as housing counseling, stronger credit histories, or lower debt-to- income ratios – in order to make the mortgage eligible for purchase by Fannie Mae or Freddie Mac.  This approach builds on the Enterprises’ experience using compensating factors and risk mitigants.”

Still Many Challenges to Overcome

These are just a few factors Watt mentioned are keeping homeowners on the sideline:

  1. Millennials are choosing to remain renters. “Signs suggest that many millennials want to own a home in the future, but are holding off on purchasing for a number of reasons,” Watt said.
  2. Student loan debt.John Burns Real…

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