New Conventional Loan Guidelines For First Time Home Buyers
This article is about New Conventional Loan Guidelines For First Time Home Buyers
Great news for first-time homebuyers for 2021 from Fannie Mae and Freddie Mac. The two GSEs, Government Sponsored Enterprises, Fannie Mae, and Freddie Mac, have reincarnated the 3% down payment for conventional loans for first-time homebuyers. Republicans view this new 3% down payment for home purchase programs as risky for conventional loan home buyers because the home buyer does not have enough skin in the game. However, the 3% down payment on a home purchase for a home buyer with a conventional loan is lower than the standard FHA 3.5% minimum down payment home purchase requirements.
For those who qualify for conventional lending guidelines, it will be well worth it. Buyers do not have to fork over as much money for their down payment. In this article, we will discuss and cover New Conventional Loan Guidelines For First Time Home Buyers.
When Will The 3% Down Payment Home Purchase Program Go Into Effect?
Fannie Mae’s 3% down payment home purchase conventional loan program will go into effect immediately. First-time homebuyers who qualify for a conventional loan can now qualify for the 3% down payment home purchase mortgage loan. Homeowners who need to refinance their mortgage loan can also qualify for a 97% refinance mortgage loan. The maximum loan limit on conventional loans is $548,250. Any loans that are higher than $548,250 are non-conforming loans and are referred to as jumbo loans.
Freddie Mac will be starting a more limited conventional mortgage loan program starting in March which will give incentives to low-income home buyers and first-time homebuyers wh get housing counseling.
3% Down Payment Conventional Loan Program
The 3% down payment home purchase conventional loan program is not new. Fannie Mae and Freddie Mac offered the 3% down payment home purchase conventional loan program up until November 2013 before it started to increase the down payment requirement in tightening its mortgage underwriting standards. The 3% down payment home purchase conventional loan program was not offered at all in all of 2014 until it was reinstituted in December 2015.
How Do I Qualify For Fannie Mae 3% Down Payment Home Purchase Conventional Loan?
In order to qualify for Fannie Mae’s 3% down payment home purchase conventional loan, the home buyer need to be a first-time homebuyer or could not have owned a home in the past three years. Freddie Mac’s standards and guidelines to qualify for the 3% down payment home purchase conventional loan are the same as Fannie Mae’s. Freddie Mac requires the home buyer to be a first-time homebuyer. The homebuyer could not previously have owned a home in the past three years. Or home buyers with low to moderate incomes or home buyers who are purchasing a home in underserved areas.
97% LTV Refinance Mortgage
Fannie Mae and Freddie Mac will permit homeowners who currently have mortgage loans backed by Fannie Mae and/or Freddie Mac to do a 97% refinance mortgage. Fannie Mae will allow refinancing mortgage loan borrowers to withdraw cash out for their refinance closing costs. Freddie Mac will not permit refinance mortgage loan borrowers to take cash out for closing costs on a 97% loan to value refinance mortgage loan.
To qualify for a mortgage with a five-star mortgage company licensed in multiple states with no lender overlays, please contact us at Gustan Cho Associates at 262-716-8151. Or text us for a faster response. Or email us at [email protected] The team at GCA Mortgage Group is available 7 days a week, evenings, weekends, and holidays.