The Not So Distant Past
Did you hear about the Declining Market’s Policy that Fannie Mae came up with in December? Hunker down.. It wasn’t very sexy! In brief:
If your home (or the home you’re purchasing) falls into an area that Fannie Mae considered a declining market, they would reduce the maximum amount they could finance by 5%. This often meant that borrowers could only borrow up 90% in many areas.
Now For The Good News
Announced on Friday (May 16th, 2008), Fannie Mae has decided to discontinue the declining markets policy on June 1, 2008. Yes, crazy! I had to take a 2nd, 3rd and maybe even 4th look to make sure I wasn’t seeing things.
If you’ve been effected by the reduced borrowing power (like so many American’s have) you’re prayers have been answered. It looks like Fannie Mae finally realized that appraisals will help present any concerns with property value.
Here’s an interesting addition to Friday’s announcement:
“Lenders should continue to carefully review appraisals to ensure that the appraiser has appropriately analyzed property value trends and overall market conditions to arrive at the value provided.”
In short – We’ll still need strong appraisals when submitting new loans after June 1st. At least the limitations have been lifted!
Where I Can Help
If you’ve been putting off buying a home in a declining market because you couldn’t come up with enough down payment, give my team a call or shoot us an e-mail! We’d be happy to discuss your financing options as they become available.
Sleep easy. Things are getting better all the time.
