Are 3% down payment loans gone?!?!?

October 22, 2013 — Leave a comment

coins growing stackAs the ‘ol saying goes…what goes down must go up….er….uhm….wait a minute….do I have that backwards?  Apparently I’m not the only one who has that backwards.  Fannie Mae, one of the nation’s largest mortgage giants, will be discontinuing it’s 3% down payment loan.

How does Fannie Mae’s decision affect your local mortgage lenders?  Fannie is the mortgage godfather, setting the rules and guidelines for lenders to follow.  The majority of home loans originated by local lenders are ultimately packaged up and sold in bulk to Fannie Mae.  This ‘sale’ positions local lenders to then go out and write more loans, helping hopeful home buyers and home refinancers alike.  However, in order for Fannie Mae to purchase loans, the loans have to meet Fannie Mae’s rules, regs and guidelines.  Hence, the mortgage godfather!

Get with your local lender who should be able to share more details with you regarding the phasing out of the 3% down payment loan.  The last thing you want to happen in negotiating a contract for you or your clients is to learn the loan program selected in the third-party financing addendum no longer is available.  Ouch!

You have until November 15th, 2013 to have you/your client’s loan submitted via Fannie Mae’s DU automated underwriting system.  Next, there are additional phase out time stamps that apply to the closing/funding of the purchase loan and then delivery to Fannie Mae.

I’ve included Fannie Mae’s selling guide update here (it’s toward bottom of page one).FNMA SEL 2013-07

Is FHA’s  (Federal Housing Administration) 3.5% down payment loan going away too??? NO, I anticipate this being around for the foreseeable future.

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