Today marks the first day of the Boston MA real estate spring market. If Black Friday marks the beginning of the Christmas shopping season, spring marks the beginning of the home buying season. Homeowners have dressed their homes to show and prospective buyers are ready to go.
Three days from now could bring a second wave of eager buyers into the market. These buyers have been held back because of Freddie Mac’s down payment requirements. On the 23rd Freddie Mac will join Fannie Mae and ease the down payment requirements mortgage lenders must observe.
Fannie and Freddie both buys or underwrites mortgages from lenders based on criteria established between them and the lenders. While both of the mortgage regulators come under the oversight of the Federal Housing Finance Agency. FHFA is the government overseer that tightened the requirements for mortgages after it (with taxpayer hard earned money) had to bail out Freddie and Fannie during the subprime mortgage disaster.
Last fall for those who were paying attention there were hints of a reversal down the road. In the Boston MA real estate market prospective home buyers with weaker credit might soon have a better chance to land a mortgage thanks to Fannie and Freddie making such loans less risky for lenders. That would be welcome news for Massachusetts home buyers and sellers alike. While it was reasonable to expect some tightening of mortgage lending rules in reaction to the subprime mortgage fiasco, the result had been significant throttling back of the number of loans banks were willing to grant. Given the higher Boston MA real estate prices and the requirement for substantial down payments that means that some home sales simply wouldn’t take place.
Beginning March 23rd prospective Boston home owners will have a much great chance as program Freddie Mac calls “Home Possible” gets started. Fannie will offer down payments starting at 3% as part of its “flexible credit terms and low down payment options”. Freddie proclaims “more flexibility for maximum financing.”
Finally this spring “Home Possible” will be the theme of the Boston MA real estate market spring selling season. Buying a house is no longer “Mission Impossible”. The snow is melting away (finally). Shake of the winter doldrums, get off the sideline and buy a home. Even with the recovery of the Boston MA real estate market prices remain reasonable and mortgage rates low. Get started here.