One of the trends in real estate that has not been talked about over the past several years is the disappearance of first-time home buyers in the marketplace. A recent article in Realtor Magazine highlights national sales data from October showing that 29% of homes purchased were by first-time home buyers, well below the typical 40% historic average. With higher home prices and tight lending regulations, first-time buyers have found qualifying for the home loan and saving the down payment to be difficult hurdles to overcome. Fortunately for these buyers, Fannie Mae and Freddie Mac have plans to help.
According to the article, Fannie and Freddie will unveil separate programs in the next few months that will allow first-time buyers meeting certain criteria to purchase an Irvine Home or Condo with a 3% down payment. Prior to these plans being announced, first-time buyers could get a loan backed by Fannie or Freddie with a 5% down payment, but these were pretty rare; most borrowers would have to come up with a 20% down payment for loans insured by Fannie or Freddie. The new programs are geared specifically towards attracting first-time buyers back to the housing market and giving it a good shot in the arm, something that would help in a year that has seen home sales decrease compared to the past two years.
The article outlines the general guidelines to qualify for the 3% down program, with the Fannie Mae plan being open to all first-time buyers and the Freddie Mac one geared towards buyers with incomes below the median income of their particular areas. If you are a first-time buyer interested in Irvine Real Estate but do not have a ton of money in savings, there are now more options for you outside of an FHA loan (which has a down payment as low as 3.5%). Talk to your lender today to learn more about these great programs!