YES!! The home mortgage market has been effectively federalized—at least for the time being. More than 90% of new loans now are being made through the federal Housing Administration insurance program, plus Fannie Mae and Freddie Mac. This means that there is more money available for home mortgages. Ginnie Mae which is the FHA’s pipeline to the bond market recorded an all-time high of $29 billion in new mortgage-backed securities issued in August!
If you are interested in buying a home then you need to know the following:
1) Loan terms and credit underwriting standards have toughened up, but you can still put down only 3% on a FHA-insured mortgage and 5% on certain Fannie Mae and Freddie Mac loan programs with private mortgage insurance. This will go up to 3.5% after January 1st. You do not need “spotless credit” to qualify for these loans.
2) Maximum loan amounts through GHA, Fannie and Freddie in high cost local markets on the West and
3) Home prices have rolled back to 2003 and 2004 levels or lower in many of the foreclosure and boom markets.
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