Fannie, Freddie 3% loans not very popular
WASHINGTON – Dec. 17, 2015 – Not many homebuyers are taking advantage of the low downpayment loans that Fannie Mae and Freddie Mac debuted about a year ago, shows a new report released from Black Knight Financial Services.In December 2014, Fannie Mae and Freddie Mac introduced loan programs that allow homebuyers to put down as little as 3 percent to purchase a home. But Black Knight’s latest Mortgage Monitor report shows that the loans from government-sponsored enterprises accounted for less than 3 percent of all high loan-to-value (LTV) loans originated this year. The high-LTV loans only made up about 1 percent of the total originations that Fannie Mae and Freddie Mac have backed so far this year.On the other hand, high-LTV loans insured by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) continue to dominate the housing market, accounting for more than 90 percent of the total number of high-LTV loan originations, according to the report.”Since 2009, FHA/VA products have made up over 90 percent of high-LTV purchase originations every year, and the same is true in 2015, even with the GSEs having reintroduced their own 97 percent LTV products,” says Ben Graboske, senior vice president at Black Knight Data & Analytics. “In fact, those products have accounted for less than 3 percent of all high-LTV originations so far this year.”High-LTV purchase originations are up – rising 20 percent in the third quarter this year and compared to a 13 percent rise for the purchase market overall, according to Black Knight.
Source: “Black Knight: Consumers Aren’t Getting Fannie, Freddie 3% Down Mortgages,” HousingWire (Dec. 7, 2015)© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688