May. 16, 2008 - Fare play from Fannie Mae

Down payments are equalized across the country

Fannie Mae today announced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee.  A conventional mortgage is one which the interest rate does not change during the entire term of the loan.  A conforming loan is one which meets the standards of the lender.  

Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional and conforming mortgages processed through its Desktop Underwriter^® automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of Desktop Underwriter, in all geographic locations in the United States.

The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining. 

The stimulus package passed and signed by the President in February raises the conforming loan limit to $729,750 through 2008 from $417,000.  Read more about this.