Fannie Mae Helps Lenders Provide Flexibilities for Creditworthy Borrowers

In today’s market, lenders are looking for advantages that can help them serve more borrowers while managing risk. Fannie Mae offers lenders a number of flexibilities to help them expand access to credit for creditworthy borrowers and support sustainable homeownership.

Flexible Sources of Funds. Fannie Mae loan generally does not require any minimum contribution from the borrower’s own funds on one-unit properties to be occupied by the borrower (including condos and PUDs). Gift or grant funds may be used for all or part of the down payment and closing costs.

Parents want to help their children purchase a first home? No problem, as long as a gift letter is provided and other applicable requirements are met. Funds can be a gift from the borrower’s spouse, child, or other dependent, or any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or a fiancé, fiancée, or domestic partner. (The donor may not be, or have any affiliation with, the builder, developer, real estate agent, or any other interested party to the transaction.)

Other sources of funds that are allowed to cover the down payment and closing costs include: employer assistance; a gift or grant from an organization such as a church, municipality, nonprofit organization (excluding credit unions), and public agencies.

For more information and resources, see Selling Guide sections B3-4.3-04: Personal Gifts and B3-4.3-06: Donations from Entities.

97% LTV Loan Options. According to consumer research conducted by Fannie Mae, the primary barrier to homeownership for first-time home buyers is saving money for the down payment and closing costs. Fannie Mae offers financing options up to 97% LTV to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment. These options are designed to help lenders serve creditworthy borrowers and expand business opportunities.

Other Flexibilities. Fannie Mae is focused on supporting broad access to mortgage credit by offering key flexibilities for creditworthy borrowers regardless of loan product or LTV. We offer Selling Guide flexibilities related to income, assets, credit, and even energy efficiency improvements, for eligible transactions up to the applicable maximum LTV. View the lender job aid for a summary and related helpful information, including how to enter information for loan casefiles in Desktop Underwriter®.

Providing flexibilities to help our lenders serve more borrowers while managing risk is just one way Fannie Mae is working hard to be America’s most valued housing partner. 

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