Fannie Mae has introduced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee. Starting June 1, Fannie Mae will accept up to 97% loan-to-value (LTV) ratios for conventional, conforming mortgages processed through its Desktop Underwriter (DU) automated underwriting system, and 95% LTV ratios for loans underwritten outside of DU, in all geographic locations in the U.S.
The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining, Fannie Mae notes.
‘As another part of our Keys to Recovery initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions,’ states Marianne Sullivan, senior vice president of single-family credit policy and risk management. ‘This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover.’
Source: Fannie Mae