Freddie Mac is doing away with their 1 percent down-payment mortgages.
HousingWire reports that the government-backed lender is changing requirements to its low down mortgage program, which will stipulate that borrowers must put at least 3 percent down to receive any type of loan.
Lenders will no longer be allowed to contribute gifts or grants to meet the 3 percent requirement.
It added that gifts or grants from the seller must not be funded through the mortgage transaction, including differential pricing in rate, discount points, or fees for individual loans or across the Home Possible offering, which means that lenders are no longer allowed to roll the 2% gift back into the loan.
The new policies go into effect on November 1.
Advertisement
Related Stories
Economics
Shelter Costs Drive Inflation Higher Than Expected in January
January Consumer Price Index data show inflation increased more than anticipated as shelter costs continue to rise despite Federal Reserve policy tightening
Economics
Weighing the Effects of the Fed's and Treasury's Latest Announcements
The upshot of the Jan. 31 announcements is that while mortgage rates will stay higher for longer, they're likely to hold steady
Economics
NAHB CEO Tobin Says 'Housing Renaissance' on the Horizon
Responding to positive housing-related data such as falling mortgage rates and increased homebuyer activity, NAHB's CEO Jim Tobin is optimistic
