Fannies Mae's Withdrawal of Declining Market Policy Will Help Housing Market

Fannie Mae today withdrew its declining market policy and adopted uniform national downpayment requirements, making financing more affordable and available and stabilizing the credit markets, said the National Association of REALTORS®(NAR).

NAR and other real estate and banking organizations have been calling on both Fannie Mae and Freddie Mac to change their declining market policies, which disproportionately affects minorities and lower income families and communities as well as first-time home buyers, further contributing to the sluggish housing market.

“These new policies will help stabilize the credit markets, which will help encourage buyers to come back into the housing market,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “The former policy was not good for many potential homeowners, and bad for the housing market because it stigmatized communities with lower sales and prices. We are pleased Fannie Mae took action to remove the extra 5 percent down payment on homes in declining markets.”

Gwen MuseEvans, Fannie Mae vice president for credit policy and controls, told hundreds of REALTORS® earlier in the week that Fannie Mae would be replacing the existing policy that required higher minimum downpayments for properties in markets that are considered declining, for a policy that allows buyers to borrow up to 97 percent loan-to-value, even in markets in which prices have declined. “We heard the concerns of NAR and we reviewed and determined that changes in our policy were needed,” said MuseEvans.

“The Fannie Mae decision is huge and will have a positive impact, perhaps significantly, on the housing market. We are very appreciative to Fannie Mae for listening to us and agreeing that these changes were needed to help more families achieve the dream of homeownership,” said Lawrence Yun, NAR chief economist.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.


Fannie Mae's News Realease Regarding Decision

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