Fannie may stop buying 3 percent down payment loans

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Fannie Mae, the U.S. government-sponsored organization designed to support the secondary mortgage market by securitizing mortgages, is mulling over whether it will stop purchasing loans with down payments of 3 percent, the Wall Street Journal reported.

Even though these low down payment loans were available throughout the housing crisis, they had been relatively rare because of the difficulty in getting insurance on them, but recent changes in the mortgage market have resulted in their numbers increasing, the Journal noted.

“Any changes to our guidelines will be communicated to the market at the appropriate time,” Andrew Wilson, a Fannie Mae spokesman, told the Journal.

Source: Wall Street Journal