New Changes to Low Down Payment Mortgages: What You Need to Know

Recently, mortgage investor Freddie Mac clarified that it would not purchase certain low down payment loans that include lender contributions to the buyers’ down payment if they were funded through premium pricing.

Does this mean super low down payments are now a thing of the past?

No. This announcement only affects proprietary grant programs offered by specific lenders, like the ones listed in this HousingWire story.

These programs allow buyers to put only 1% down with the other 2% of the down payment provided by the lender. The new change will require the first 3% down to come from either the borrower’s personal funds and/or other eligible sources such as a gift from a family member or approved non-profit. keep reading

FHA: Affordable or Not?

If you’re a first-time homebuyer, you’ve likely heard of an FHA loan. Why do so many first-timers flock to FHA?

These loans, insured by the Federal Housing Administration, can be a great fit for new buyers because they allow low down payments (3.5%), good long-term interest rates and flexible qualifications. However, these affordable loans also include premiums (loan fees) and mortgage insurance for your lender to manage the risk on the loan. It protects your lender in case you default on your loan. keep reading