I don't know if you have heard, but Fannie Mae is increasing its down payment from 3% to 5% starting November 15th of this year.
Now what does all of this mean? Well it means that people that have been struggling to save for a down payment (which is most all First Time Home Buyers) are going to have a harder time to be able to purchase a home. I truly hate to see this program go because FHA is going to be the only option for First Time Buyers with little down and they are going to be stuck with FHA’s PMI for the life of the loan.
Now here is what I have noticed whether intended by Fannie Mae or otherwise……… Fannie Mae is going to push credit borrowers with higher credit scores back to FHA thus improving FHA’s default ratio. Now is this an unspoken objective? Is it Good? Is it Bad? I really don’t know, this will have to be determined. But what I do know is that Good Credit Borrowers are going to be stuck with higher mortgage insurance cost and will have higher payments to purchase a home.