New lower down payments and borrowing rules are easing for first-time homebuyers in the U.S. 

Homes for sale
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Federal mortgage backers, Fannie Mae and Freddie Mac, have lowered the minimum down payment from 5 percent to 3 percent for low-income and first-time buyers. However, the lower down payment is only available for those that meet a certain income level.  In New Jersey, it's $128,000 a year or lower.

"It's a tremendous opportunity for people who are out there looking for their first home," said Glen Durr, president of New Jersey Lenders Corporation.

Durr said the lower minimum payment requirement will open up the door to a wide number of people in New Jersey.

In addition, new rules also dictate that loans without any missed payments for 36 consecutive months will be backed by Freddie Mac or Fannie Mae if they default.  Before, lenders ran the risk of being forced by the federal government to buyback any defaulted housing loans.

Homebuyers will also be allowed to miss two payments within a 36-month period without the threat of foreclosure.

"I think it will be good for pretty much everyone when more people who are credit-worthy and have the ability to make their monthly payments are able to get a loan," Durr said.

Borrowers with slightly lower credit scores are also having an easier time getting loans now that some rules have eased.

Durr said the housing market is a wide field of opportunity right now for many buyers, but most especially those taking the plunge for the first time. "The prices still have not recovered to where they were 10 years ago or so, and I think interest rates are still near historic lows. The affordability factor is still very, very good."

As far as mortgage insurance is concerned, the Federal Housing Administration will allow 3.5 percent down payments for mortgages, but require borrowers to pay mortgage insurance premiums over the entire course of the mortgage.

To learn more about the new requirements, click here.



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