To incentivize the housing market, Fannie Mae and Freddie Mac laid out guidelines for a 97% LTV (loan to value) fixed rate mortgage. It breaks the market wide open to millennials, those born in 1982 and the two successive decades. They have been renting rather than buying and have been a drag on the overall market. The 3% mortgage (lowered from 5% this last month) empowers credit worthy, first time home buyers who were precluded from purchasing because of insufficient funds for the down payment and closing costs. Also significant: the entire down payment can be a gift from a family member. The maximum loan amount is $417,000, which is an obvious limitation in California’s HOT real estate market.

The 3% mortgage is an important tool for agents marketing to young, low-to- moderate income consumers looking for a starter home or condo.

For more information, please call Mike at 1 (800) 230-1103 or email Mike@mycahomeloan.com.