Fannie Mae and Freddie Mac announced new products for homebuyers on a budget. For just a 3 percent down payment, certain consumers can now get a loan from both government-sponsored lenders for a home purchase or refinance transaction, which means the agency will finance up to 97 percent loan-to-value.
Freddie Mac's Home Possible mortgages are also available for as little as 3 percent to 5 percent down, targeting homebuyers in high-cost and undeserved communities. These new products are designed to compete with the low-down-payment options offered by the Federal Housing Administration (FHA), which offers loans for as little as 3.5 percent down for those with a credit score of at least 580.
Housing prices are on the rise across the country, which has put a strain on first-time buyers. The National Association of REALTORS® (NAR) and Freddie Mac estimate that median price growth will accelerate by 3.5% in 2018, and in some cases will continue to rise faster than income gains over the coming years.
Additionally, Fannie Mae and Freddie Mac announced they are ending their single-family rental pilot program, a victory for NAR who had urged the Federal Housing Finance Agency (FHFA) to stop the program. Earlier this week, the
FHFA ended the program which had provided liquidity to institutional investors to purchase single-family homes for rental housing. The action is consistent with NAR’s long-term position that the companies should maintain their focus on ensuring liquidity for home sales.
"With inventory shortages facing housing markets across the country, the National Association of REALTORS® has long advocated for the Federal Housing Finance Agency to end its expansion into the single-family rental market and return its focus to promoting a liquid and efficient housing market, as Congress intended. By financing the purchase of thousands of single-family homes for institutional investors to use as rentals, Fannie Mae and Freddie Mac compounded on inventory shortages and affordability concerns, which are holding back prospective homebuyers across the country. NAR applauds today’s FHFA decision, and we look forward to continue working with Fannie Mae and Freddie Mac to help more Americans achieve homeownership going forward," said NAR President Elizabeth Mendenhall.