Why 100% Financing Is Saying Goodbye

February 17th, 2008 categories: Buyers, Market Statistics, Real Estate News

With the ever increasing lending restrictions being tightened, FANNIE MAE (Federal National Mortgage Association- the guys that buy a lot of the mortgages and set most of the lending guidelines) has once again made it a little more difficult for some to grasp the goal of home ownership.

They are in the process of judging markets across the United States and deciding if they are considered Declining or NOT. Just for your information, Loudoun and Fairfax have been flagged as DECLINING. Yikes. Well, lets be honest, we all knew this.

Fannie Mae does not currently buy loans over the conforming limit of $417,000. This does not mean that they will not provide financing for homes in a declining market. It only means that they will not provide ONE HUNDRED PERCENT FINANCING for homes in a declining market. Most lenders will now require at least 5% down.

Many buyers should consider FHA loans which have tight restrictions but will allow 3% down and will work with rough credit.

For more information about this issue which we have yet to see play out check out this Fannie Mae website HERE.

Lets pray that this will help in the long run, but I fear that the issue isn’t as much about current buyers put previous buyers with bad loans.