Fannie Mae Lending Guidelines Change; More Strict On Borrowers

In conjuction with the temporary raise in loan limits, Fanne Mae has announced new lending guidelines for these new "jumbo-conforming" loans, which are more strict on borrwers than before. The possibility of this happening is why we wrote a post questioning whether the economic stimulus bill and higher loan limits would have a positive or negative effect on the housing and lending market.

In a nutshell, the new guidelines state that you:

• must have more money for a down payment
• need higher credit scores than before (in some cases)
• must have more money in reserves
• need to have less debt
• have to use at least 5% of your own money for a down payment rather than using all of the gift money from family towards the down payment
• are not allowed to receive more than 3% seller concessions

Here’s the above "in a nutshell" summary in more detail (directly from Fannie Mae):

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