Fannie Mae has announced its new 97% conventional loan product.
Designed for qualified first-time buyers, the new loan program will provide financing with 3% down to well-qualified borrowers.
The new Fannie Mae program compares favorably to FHA financing with a 3.5% down payment because FHA financing requires costlier mortgage insurance.
This new loan program also includes a home buyer education and counseling component.
And. there’s a refinancing option for qualified borrowers.
It’s important to understand that this new loan product is primarily intended to facilitate home ownership to qualified first-time buyers.
This is not a return to the wild days of low documentation/no documentation loans that contributed to the housing collapse a few years ago.
All loans will be fully-underwritten and borrowers can expect to be required to provide extensive documentation as part of the loan approval process.
Source: Fannie Mae Lender Fact Sheet