Urban Real Estate

Mortgage Standards Loosening For Some Borrowers

Mortgage Standards Loosening For Some Borrowers

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.