Fannie Mae, the 2nd largest secondary mortgage market company, has been requiring home buyers to come up with an extra 5% down for down-payment towards a home in what they call a “declining market”. As of June 1st, this policy will change.
Fannie Mae’s new policy states that borrowers can receive up to 95% loan to value. This includes markets where home prices are declining.
I for one, along with many other REALTORS, have felt this discourages buyers from purchasing homes in markets that have been flooded with foreclosures. Dick Gaylord, President of the National Association of Realtors agrees. He believes that this policy “stigmatizes communities with lower sales prices.”