The Greater Boston Association of Realtors reports good news for home buyers in 2015.
For mortgages acquired by Fannie Mae and Freddie Mac, the conforming loan limit for a single-family home will remain at $417,000 next year for the majority of the country. In some markets, however, jumbo loan limits will rise, reflecting that these areas have seen home values rise by some of the largest amounts in the past year, says the Federal Housing Financing Agency (FHFA). Limits in the Boston metro area, including the counties of Essex, Middlesex, Norfolk, Plymouth, and Suffolk, will jump from $470,350 to $517,500.
In related news, in an effort to open up lending to more low-income and first time home buyers, Fannie Mae and Freddie Mac have announced their intentions to start backing mortgages with down payments of as little as 3% of a home's price. But borrowers will still need to meet strict criteria first.
The new loans will only be issued to those who buy private mortgage insurance, have a credit score of at least 620 and offer complete documentation of their income, assets and job status. And, to further mitigate risk, the agencies will require borrowers to receive home ownership counseling.
Both programs are for fixed-rate loans given to first time homebuyers and those seeking to refinance. Fannie will start backing the loans as soon as December 13, while Freddie will start offering them March 23, 2015.
The move should expand access to credit for first-time homebuyers, typically younger buyers who have not have had enough time to save a big lump sum.
Fannie and Freddie already back mortgages with as low as 5% down. And the Federal Housing Administration insures 3.5% loans.