Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) officially announced new programs allowing mortgages with just a 3% down payment. Both GSEs say that as long as other underwriting standards are still in place, and the total volume of loans is relatively small, the low down payment loans don’t add too much risk to their businesses.
“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans,” said Federal Housing Finance Agency...
