Freddie, Fannie offering mortgages at 3 percent down

Fannie Mae and Freddie Mac are accepting lower mortgage down payments, hoping to boost home ownership across the nation.

The government-run lenders are offering mortgages at 3 percent down to low-to-moderate income earners with credit scores as low as 620.

“It really opens up the market to first-time homebuyers, or homebuyers who may otherwise not have the higher down payments that the industry normally sees,” says Chris Nooney, vice president of First Choice Loans in Cypress.

“Whether it's a college student coming out who has good income, they just haven't saved enough for a down payment, or somebody who may have the monthly income but doesn't have money in savings,” he says. “It really allows them to get into a home with minimal contribution that has a mortgage payment that's many times lower than what they would pay in rent.”

However, newer regulations put in place over the past decade monitor a buyer's ability to pay back the loan.

“There is validating income, assets, credit and employment,” says Nooney. “It's not the willy-nilly of what happened before the credit crisis back in 2007-08.”

The offer comes as housing prices are expected to rise 3.5 percent this year.