Freddie Mac announced that it is scheduled to start buying mortgages with down payments of only 3% – the first time down payments have been this low on Freddie Mac loans in nearly five years. The program is called Freddie Mac Home Advantage.
In a recent Executive Perspectives, Dave Lowman EVP, Single-Family Business Freddie Mac, explained the potential impact this program will have on the housing market:
“There's a new reason Realtors and lenders may expect more qualified borrowers at the closing table during this spring's home buying season. In addition to low mortgage rates and rising job growth, the down payment hurdle is starting to shrink for credit-worthy borrowers, including first-time homebuyers.”
And the mortgage industry agrees with Mr. Lowman. In a recent survey of mortgage originators by the National Association of Realtors (NAR), it was revealed that most loan officers believe the move to a lower down payment will increase access to mortgage credit. Here are that survey’s findings:
Bottom Line
Many potential buyers are “ready and willing” to buy a home but have been afraid they may not be “able” because of a lack of adequate savings for a down payment. If you have any questions, we're here to help! Give us a call at 720-200-6868.
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