FHA, Fannie Mae & Freddie Mac Are Still Going Strong

October 23, 2008

HUD, FHA, Fannie Mae and Freddie Mac are ready and willing to help all homeowners and homebuyersEven though the credit markets have been frozen, homebuyers can rest assured that the FHA, Fannie Mae and Freddie Mac are still open for business during the credit squeeze.  In fact, FHA’s volume has tripled.  They are even insuring over 100,000 new loans a month.  According to a spokesperson with HUD, FHA, Fannie Mae and Freddie Mac have kept liquidity up for new homebuyers and have virtually unlimited funds for new mortgages.  Combined, these three entities control 90% of US mortgages.  The credit crunch will not affect homebuyers with at least a 3% down payment, a documentable employment record and moderately good credit rating.  While business and commercial loans have been a bit harder to come by in the last few weeks, qualified homebuyers looking to purchase or refinance mortgages haven’t had that trouble.

HUD’s Financial Stability Oversight Board’s primary responsibility over the next several weeks will be to refinance or help work out delinquent subprime homes financed by private lenders during the previous boom years.  Their Hope for Homeowners program is set up to cut the principal and monthly payments and interest rates of delinquent loans through refinancing into fixed rate FHA mortgages.

The government has also infused HUD with $3.9 billion to create a Neighborhood Stabilization program.  This program allows HUD to provide funds to local governments to buy, fix up or rent out foreclosed homes in an effort to ease neighborhoods where the high volume of foreclosed homes has brought a decrease in home values.  The Neighborhood Stabilization program offers local governments the ability to play a role in fighting the sluggish housing market and provides an opportunity for real estate agents, builders and investors to profit in the turnaround efforts.  For those interested in the Neighborhood Stabilization program, speak with your local city or county housing officials for more information.

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