October 31st, 2016 5:06 AM by Jackie Graves, President
Potential home buyers who can’t
quite pony up the traditional 20% down payment have often had FHA loans as an alternative. But some
lenders are shying away from these loans for legal and regulatory reasons.
Over the last few months, those same lenders have begun filling
the gap with their own low-down-payment loan products. Some require mortgage
insurance, similar to FHA loans. The premiums you pay protect the lender in
case you default.
Here’s what you need to know about the low-down-payment programs from major
seems that 3% down is the new magic number for most lenders. That’s because Fannie Mae and Freddie Mac,
the government-sponsored enterprises that provide capital to the mortgage
market, will buy loans with 97% financing.