Friday, May 16, 2008

FANNIE MAE SCRAPS DECLINING MARKETS POLICY

There's good news today out of Washington, where mortgage giant Fannie Mae has announced it will discontinue its "declining markets" policy June 1.

The controversial initiative, launched earlier this year, increased downpayment requirements for hundreds of thousands of borrowers in areas (including Denver) that were "redlined" by Fannie Mae for having experienced declining values.

So what does it mean?

Beginning June 1, buyers using Fannie Mae loan products will have the option of making lower down payments when purchasing a home. Increased flexibility with down payment requirements should bring more buyers back into the market, which bodes well for a further draw-down of our available housing inventory.