In an effort to give more first-time buyers and low-to-middle income earners a better chance to buy a house at low rates, the Federal Housing Finance Agency announced on Monday a plan to loosen rules on mortgages.
“We know that access to credit remains tight for many borrowers, and we are also working to address this issue in a responsible and thoughtful manner,” Melvin Watt, the director of the FHFA, said in a speech at the Mortgage Bankers Association Annual Convention.
As part of the changes, the FHFA said it would create specific guidelines for mortgages with loan-to-value ratios between 95-and-97 percent to “increase access for creditworthy but lower-wealth borrowers.” While Watt’s speech did not offer much in the way of specifics, it has been reported that the new plan, to be outlined in the coming weeks, could allow for down payments as low as 3 percent for certain borrowers.
“Through these revised guidelines, we believe that the Enterprises will be able to responsibly serve a targeted segment of creditworthy borrowers with lower-down payment mortgages by taking into account ‘compensating factors,’” Watt said.
This article originally published at http://dc.urbanturf.com/articles/blog/fhfa_to_loosen_rules_on_mortgages/9119
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