Mortgage contract

The Federal National Mortgage Association, or “Fannie Mae,” was established in 1938 to expand access to loans for families, including those in the New Mexican market. They “don’t originate mortgage loans or lend money directly to borrowers. Instead, [they] purchase mortgage loans made by lenders, who are then able to use those funds to offer mortgage loans to more people.”

Fannie May recently changed their down payment requirements for two-to-four-unit multifamily loans. These changes aim to increase access to credit and support affordable rental housing as the maximum allowable loan-to-value ratio (LTV) for a principal residence purchase of a two-to-four-unit property will now be updated to 95%. Previously, the maximum allowable LTV for a two-unit property was 85% and 75% for a three- or four-unit property. This means that borrowers can now put down as little as 5%.

This requirement update is a huge difference and a positive change from Fannie Mae. Borrowers who intend to buy a 2–4-unit property can now make a down payment of just 5% if they plan to live in one of the units. However, this offer does not apply to non-owner properties or rental properties. On the other hand, borrowers in New Mexico looking to refinance a 2–4-unit property can do so up to 95%, but no cash-out.

Indigo Mortgage has helped New Mexicans finance single-family homes and investment properties for more than 20 years. We understand the complexities and can help you navigate purchasing an Albuquerque-area property.

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