Recently Fannie Mae announced a new minimum down payment requirement of 3% for all owner occupied new home purchase transactions. Fannie Mae had begun to require a 5% down payment on properties it considered to be in a declining market. The majority of Western Michigan fell into this category.
Many were excited to see the new lower down payment requirements from Fannie Mae as this would open up the opportunity for more individuals to become homeowners. While the news on the surface is good, it unfortunately has little effect on those looking to buy a home in West Michigan.
All conventional mortgages with a down payment of less than 15 to 20% require some form of PMI insurance. For the most part, most of the PMI companies are unwilling to follow Fannie Mae's lead and allow for down payments as low as 3%. Most require a minimum of a 5% down payment and have changed their guidelines significantly.
So what's a potential home buyer with a limited down payment to do? Fortunately, the governments FHA home loan program is alive and well. At First Place, we are a delegated FHA lender and are able to approve all of our FHA loans locally in our office. This means we have the experience and team available to close your loan quickly.
To find out if you qualify for an FHA loan, give us a call, we would be honored to assist you.
