Fannie Mae and Freddie Mac support mortgages with as little as 3% down. This is a significant drop from their previously supported 5% minimum down payment.
This will help low income and first time home owners be able buy a home. However, borrowers will still need to be required to meet strict criteria to qualify for the this type of mortgage. To qualify, buyers will need to have a minimum credit score of 620, offer detailed information on employment and assets, and attend home ownership counseling.
Further good news to buyers potentially interested in this type of loan, private mortgage insurance (PMI) will drop after the mortgage balance is less than 80%. In contrast, FHA loans require a minimum of 3.5% down and the PMI remains active for the life of the loan.
Ask your mortgage broker to see if you can qualify for this program. If you want recommendations, contact me bellow.