Conventional Loan Guidelines Start To Tighten

Dated: December 14 2019

Views: 448

Based off Wall Street Journal article by Ben Eisen, Fannie Mae and Freddie Mac (the largest suppliers of mortgage loans regulated by the government) are cutting back on the proportion of loans they back on borrowers with high debt and low downpayments.  The tighten of their underwriting guidelines ultimately hurt their mission of making homeownership more accessible and affordable.

Why are Fannie and Freddie doing this?  They want to lower the risk of the pool of loans they back and increase profitibility to obtain more private investor money.  It also will help them get out of conservatorship of the government.

These "riskier borrowers" that Fannie and Freddie will not approve for a loan still have other avenues for loan approval with FHA, VA, and USDA loan products.  Therefore we should see an increase in these govement loan offerings.

To see the complete article, click here.  

Blog author image

Melvin Drury

After obtaining an Accounting degree at the University of Kentucky, Mel practiced as a Certified Public Accountant in Southern California and Kentucky prior to being introduced to the real estate indu....

Latest Blog Posts

Naples Real Estate Market Ends Strong for 2019

Naples real estate ends the decade strong in Home Sales!  According to Naples Area Board of Realtors (NABOR), closed sales were up 5.6% from 2018 to 2019.  The elephant on this statistic

Read More

A Life Lesson We All Need

Every year, when reviewing my goals and business plan, I can never forget this old story - The Mayonnaise Jar.  This story was presented to me several years ago, and impacted my life

Read More

Conventional Loan Guidelines Start To Tighten

Based off Wall Street Journal article by Ben Eisen, Fannie Mae and Freddie Mac (the largest suppliers of mortgage loans regulated by the government) are cutting back on the proportion of loans they

Read More

5 Important Factors In Pricing Your Home

When you put your home up for sale, one of the best ways to determine the asking price is to look at comparable sales. There’s rarely a perfect apples-to-apples comparison, so a pricing

Read More