So what's the story with the new 3% Down Mortgage everyone is talking amount?
It's true, a new 3% down option is on the way for conventional buyers. But what's the catch, right? Well let's start with the good stuff:
- Buyers will be able to put just 3% down!
- Max amount up to $417,000.
- While it's yet to be determined my guess is credit scores as low as 660 will be accepted.
- If the borrower makes $75,400 or less (in the 5 counties around Austin), the source of the down payment can be a Gift from a family member!
- No geographic restrictions...we can close these loans anywhere in Texas.
- Refinances of existing FannieMae or FreddieMac loans are allows up to the full 97% loan to value.
- Mortgage Insurance rates will be lower than FHA in most cases and will not be permanent as with most FHA loans.
Now for some of the restrictions:
- At least 1 borrower must be a first time home-buyer....meaning they haven't owned a home in the last 3 years.
- Single Family Homes and Condos only
- These loans are not available yet. FannieMae releases them on December 13, 2014 however lenders must update their guidelines and origination systems before underwriting these loans. My best guess is that we will begin to offer these in early January.
I'm very excited to see this new program come back to the market. It will make purchasing a home more affordable to central Texas home buyers especially in light of the 10% year-over-year appreciation that Austin and surrounding cities have experienced over the last few years. Imagine having the opportunity to purchase a $400,000 home with just $12,000 down. Or how about a $200,000 home with just $6,000 down. It's a huge opportunity for both prospective home buyers and the real estate community.
For more information, or if you'd like to be notified when this program is available to underwrite and close, contact me.
If you'd like to know more about the home buying process, here is a link with next steps.