Fannie Mae may back fewer low-down-payment loans

The Wall Street Journal says that Fannie Mae is considering reducing the number of low-down-payment loans it purchases.

You might not have known this: Even with higher mortgage standards (by law or by market forces), Fannie Mae would still purchase loans that had only three percent down payments. Of course, there weren’t many of them around — the catch was that Fannie required mortgage insurance on those loans, which wasn’t easy to come by.

But now, the Journal reports, Fannie is seeing more of those three-percent-down loans, and is considering limiting its purchase of them. (Freddie Mac requires a five percent down payment to buy or insure a loan.)

What happened? On the one hand, FHA raised its insurance premiums for low-down-payment mortgages. On the other hand, private mortgage insurers have removed some restrictions and begun offering better rates — and that’s made it possible for private lenders to begin offering low-down-payment loans again.

Oh, just go and read the story yourself.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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One Response to Fannie Mae may back fewer low-down-payment loans

  1. tom says:

    Hey again barbuzz! Your’s article are so very helpfull! I’m find your blog after a agresive conversation with my friend about Virginia:)

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