One of the biggest struggles potential first time homeowners faced in 2014 was the difficulty in saving the 20% down payment to purchase a house. With the tightened lending rules, home ownership appeared to be a drifting dream for many young Americans.

In 2015, the dream of home ownership will stop drifting, and become a reality for many. Both Fannie Mae and Freddie Mac have announced new low down payment programs. That’s not all. Realtor.com published an article recently that reported that the Federal Housing Administration is intending to lower the annual mortgage insurance premium rate from 1.35% to .85%.

Similarities Between Fannie and Freddie

  • According to another article published by Realtor.com, both programs will offer 3% down payment loans to those with credit scores of 620.
  • Mortgages offered at the 3% and the 5% will require private mortgage insurance.

Fannie Mae’s Low Down Payment Program

  • Fannie Mae will be offering their program to those who have not owned a home in the past three years.
  • This program will go into effect almost immediately this year.

Freddie Mac’s Low Down Payment Program

  • Freddie Mac’s program will be directed to those who do not make more than their area’s median income.
  • According to Dave Lowman an executive at Freddie Mac, the program

 “gives qualified borrowers with limited down payment savings a responsible path to homeownership and lenders a new tool for reaching eligible working families ready to own a home of their own,”

  • Is reported to go into effect in March of this year.

FHA Lowers Mortgage Insurance Premiums

Realtor.com reported that the Federal Housing Commission has announced that they are lowering their mortgage insurance premiums from 1.25% to .0.85%.

A mortgage insurance premium is an upfront fee and an annual fee that is collected monthly for those who do not have 20% equity in their home.

According to Adam McLain, a mortgage broker at Wintrust Mortgage, this is huge for the consumer. He explained that the decrease could save the home owner up to $100 per month. Instead of that $100 going to the mortgage insurance premium, it can go toward the home price. That is $25,000 more in increased purchase power.

The Wealth Building Home Loan

Another program that has yet to officially roll out is the Wealth Building Home Loan. This loan allows for a lower down payment and instead of a 30-year fixed, it’s a 15-year fixed. 

Summary

All in all, first-time home buyers have a good outlook in 2015. If you would like to start your search for your dream home, you may like to read, How to Start Your Search for Your Dream Home.

If you are ready to start looking now, please call our office at:

248-348-7200