How Will Fannie Mae Changes Affect North Atlanta Home Buyers?

gift money for house downpaymentIf you’re ready to buy a home in north Atlanta, it’s important to understand your options when it comes to the down payment and mortgage. Recent news from the Federal National Mortgage Association, also known as Fannie Mae, could have an impact on your home purchase.

3% down program discontinued

Previously, Fannie Mae had a conventional 3% down program, which was great for homeowners who didn’t have the funds for a full 5% down payment or who wanted to use the money from that other 2% for home improvements. Now buyers will have to put 5% down no matter what. Those who need to put less than 5% down will have to choose Federal Housing Administration (FHA) loans, which include more upfront costs and higher Private Mortgage Insurance (PMI) payments.

In addition to the 3% program, previous Fannie Mae guidelines indicated that if a borrower was putting down 5%, 3% of that down payment had to be their own money, while only 2% could be a gift. So what’s changed?

Fannie Mae allows increased gift funds

The good news is that, while the updated Fannie Mae guidelines require a 5% down payment, the entire 5% can now come from gift funds. This is especially beneficial for first-time home buyers, many of whom have limited funds but may have a relative who wants to help them buy a home.

Whether you are looking for a starter home, your dream house, or maybe you’re looking to downsize, we can help you find a great home for a great price. To get started with your north Atlanta real estate search, contact Barry Wolfert and Lisa Wrenn today!

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