It may have just gotten easier to buy a home.
New Fannie Mae rules allow for “nontraditional” credit histories – and that means borrowers without a FICO credit score may now be eligible for Fannie Mae-backed loans.
To understand how this all works, you first need to know what Fannie Mae is.
What is Fannie Mae?
Fannie Mae is a company that backs mortgages made by private lenders. The company sells those loans in bundles as securities, and investors purchase them to make money.
Lenders used to put borrower data into the Fannie Mae automated system to find out whether the person was eligible for a loan. If borrowers did not have FICO credit scores, lenders would have to determine their creditworthiness on their own – and many lenders felt that the risk of those loans failing was too great.
Now, however, Fannie Mae has made it a bit easier for borrowers to get the money they need to purchase homes. Rather than pay stubs and tax records being necessary, the company’s new process allows employment and income histories from Equifax (the credit bureau) to prove creditworthiness.
If buyers can show that they’re likely to make their monthly payments, it will now be easier for them to obtain financing. Over the past several years, people with less than perfect credit or no credit history at all have had an extremely difficult time trying to qualify for mortgages; these new rules could change that.
Are You Looking for a New Home or Land for Sale in North Florida?
If you’re looking for a new home for land for sale in North Florida, we can help.
Call us at 386-243-0124 or contact us online to let us know what you’re looking for. We will be happy to begin a custom search just for you.
