Mortgages have been difficult to aquire since the years of the real estate bubble, largely due to strict adherence to requirements laid out by the banking industry to avoid a repeat of those mistakes.
But mortgage giants Fannie Mae and Freddie Mac are loosening those standards to reach more credit-worthy borrowers that have moderate incomes, good credit scores, but lack the 20 percent down payments for traditional financing.
The changes include:
• Minimum down payments going as low as 3 percent (and even 1 percent)
• Looser definitions of "income"
• Underwriting flexibility in order to work with multi-generational households that may have more than one or two earners
• Debt-to-income ratios of up to 45 and 50 percent.
Check out more at the Chicago Tribune here.