Fannie Tightens Interest-Only Requirements
Fannie Mae announced Friday that it plans to require borrowers using interest-only mortgages to put down 30 percent of the sale price.
Fannie Mae also said it will only buy adjustable-rate mortgages underwritten to require that borrowers could afford the loans even if interest rates reset to the higher of either:
- The loan’s initial interest rate plus two percentage points.
- The cap, the maximum the interest rate can rise.
“Our goal is to make sure consumers can sustain their mortgages and remain in their homes over the long-term, while helping our lender partners offer a range of mortgage products for qualified borrowers,” says Marianne Sullivan, senior vice president of Single Family Credit Policy and Risk Management at Fannie Mae, in a prepared release.
Source: CNN Money.com, Les Christie (04/30/2010)