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Fannie Mae Releases New 5% Down Payment Option for Multi-Family Homes

Fannie Mae’s Bold Step Towards Affordable Multi-Family Home Ownership

Fannie Mae recently unveiled a new opportunity for real estate investors and first-time buyers alike. The introduction of a 5% down payment option for multi-family homes is set to reshape the landscape of property investments.


Lower Down Payment Requirements: A New Era in Real Estate Financing

Beginning November 18, 2023, Fannie Mae Conventional Loans are now offering borrowers the ability to secure a 2-4 unit owner-occupied home with just a 5% down payment. This shift in policy extends to a range of owner-occupied transactions, including standard purchases, no-cash-out refinances, and HomeReady and HomeStyle Renovation loans.


Empowering First-Time Buyers and Mortgage Relief Seekers

This groundbreaking update opens doors for first-time buyers and individuals looking to alleviate the burden of high mortgage payments. With Fannie Mae’s more accessible financing options, aspiring homeowners can turn their dreams into reality.


Maximizing Potential: Loan Limits and New FHA Self-Sufficiency Test Update

For 2-4 unit properties, Fannie Mae set a maximum loan amount of $1,396,800. This substantial limit provides borrowers with ample flexibility to explore a diverse range of multi-family housing options.

 

In an effort to simplify the approval process, Fannie Mae also removed the FHA self-sufficiency test requirement for 3-4 unit properties. This means that buyers will face fewer obstacles when seeking pre-approval for multi-family homes with three or four units.


Shifting From 15% to 5% Down Payments

Previously, borrowers were required to put down 15% for two-family homes and a hefty 25% for 3-4 family homes to secure a Fannie Mae Conventional Loan. The reduction to a 5% down payment represents a monumental shift in accessibility for borrowers.


The Advantages of Conventional Financing

Opting for conventional financing provides borrowers with a host of benefits, including increased acceptance rates from sellers, a decreased likelihood of appraisal complications, and potential savings on mortgage insurance costs.


Closing Thoughts

Fannie Mae’s decision to lower down payment requirements for multi-family homes marks a significant stride towards improving accessibility to affordable housing options. 

 

This progressive policy change not only brings the dream of multi-family home ownership within closer reach but also presents the potential for generating rental income. To learn more about this exciting update, give us a call or visit us online.

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