Lenders will no longer be allowed to contribute gifts or grants to meet the 3 percent requirement
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.