Fannie Mae, one of the nations largest players in the secondary market (where mortgages are bought and sold) has just changed its mind about requiring an additional 5% down payment in areas that it considers to have “declining market values”. Of course, a declining market encompasses most of the United States. So, the good news is that depending on a borrower’s credit score, Fannie Mae will consider financing a borrower with 3% down. However, any borrower who is putting down less than 20% will normally need private mortgage insurance, so just because Fannie Mae will allow less of a down payment, that doesn’t necessarily mean that the PMI company won’t require an additional down payment.

As with all financing situations, stay tuned!