5/19/2008

FNMA: California No Longer a "Declining Market"

Since last December, California was named a "declining market" by FNMA ("FannieMae"), but in the spirit of its original mission under its 1938 creation under Franklin D. Roosevelt to "help those who house America", last Friday, May 16th, it removed that designation.

So what does this mean for you? "The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining...", which means that once again 3% and 5% down payment conventional loan programs will be allowed in California (and other areas). For the last several months, no matter how good your credit was, a buyer couldn't get a loan unles he/she had 10% down funds of the purchase price. So if you were making an offer on a $500,000 home, you had to have $50,000 down payment funds, and many of the first-time buyer programs that might otherwise have been able to assist you are just not available right now. The new policy goes into effect June 1, so hopefully we will be seeing those loan options returning to the local market sometime after that.

'Voice this!

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