August 18, 2017
‘1% Down-payment Mortgages End Nov. 1’
By James D. York, P.A.
Starting this fall, Freddie Mac will require a minimum 3% downpayment from the borrower’s own funds for its mortgages, including those purchased from other lenders. Since 2014, 3% Freddie Mac loans had been available to some borrowers, with lenders including Quicken Loans and Guaranteed Rate augmenting that by 2% to offer borrowers a 1% downpayment option.
New guidelines issued by the financing giant last week will disallow this practice. Freddie Mac’s statement says, "Gifts or grants from the seller as the originating lender will be permitted only after a contribution of at least 3 percent of value is made from the borrower's personal funds and/or other eligible sources of funds.”
Gifts from the lender or seller (differential rate pricing, discount points, fees for individual loans, etc.) will no longer be allowed as part of the mortgage process until after the 3% minimum has been met by the borrower. Borrowers may receive and use funds from relatives, employer housing programs, and government agencies.
For more details, see Freddie Mac’s full statement at http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1711.pdf.
So, get your 1% downpayment in the works soon – before thee changes take place. Just give us a call with any questions you might have about the timing of your buying or selling. 239-273-6727
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York Real Estate Group consists of James, Michael, and Morgan York, Florida Realtors with Downing-Frye Realty. James York is the winner of the prestigious 2014 and 2015 SWFL People’s Choice Best Realtor Award. The group has over 25 years combined experience and over $275 million in sales transactions. Visit The York Group website at www.naplesyorkrealestate.com for all current MLS listings of houses for sale in Naples, Marco, Bonita, and Estero. If you have other questions, the York’s invite you to email or call them at JYorkinFL@cs.com or 239-273-6727.