What 3% Down Payments Mean for Millennials
Following a move by mortgage lenders to loosen standards for homeowners, Freddie Mac and Fannie Mae will begin backing home loans with down payments as low as three percent. This could bode well for the millennial generation, many of whom have yet to own their first home.
“This is exactly what our industry needed to propel millennials into homeownership for the first time and to keep Main Street growing and thriving,” said Don Frommeyer, CEO of NAMB – The Association of Mortgage Professionals.
Under the new programs, first-time homebuyers and low- and moderate-income individuals who finance a fixed-rate mortgage can expect a less stringent lending process as opportunities for loan approvals without the required five percent down payment become readily available.
Applicants seeking the lower down payment must demonstrate an ability to repay the loan, secure mortgage insurance and attend pre-purchase counseling.