CONVENTIONAL FINANCING MILESTONE
GUEST BLOG WRITTEN BY: GREG THOMAS
November 15th marks another milestone for conventional financing. The minimum down payment of 3% for Fannie Mae backed loans is once again moving back up to 5%. This move will match their Freddie Mac counterpart current requirements. Many lenders will still be able to offer the Conventional 3% down payment program for folks that currently have accepted offer and are in a position to lock their loan by the end of business tomorrow. This probably goes without saying, but a limited amount of folks currently in the market will be able to take advantage of this.
This upcoming change should not be a deterrent for conventional financing for folks that need a low down payment option. Many people do not realize that a gift from a family member is allowed with conventional financing. For example, if a buyer only has 3% of the own money they can receive a 2% (or more) gift. There are even some lenders that allow for the entire down payment to be a gift and still be eligible for conventional financing. This is huge for anyone that thinks or has been told FHA is the only loan available to them. FHA loans have expense financed fees and lifetime PMI!!! Whereas, conventional financing has many more options and is a much less expensive. Be sure to check with a trusted mortgage professional for more details and find out what ALL of your options are before signing on the dotted line.
