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Fannie Mae announces 97% LTV Options!

Fannie Mae announces 97% LTV Options

For First-Time Home Buyers and Limited Cash-Out Refinance of Fannie Mae Loans


Only 1 buyer needs to be a first time homebuyer. Release of the program is December 13, 2014.


According to consumer research conducted by Fannie Mae, the primary barrier to homeownership for first-time home buyers is saving money for the down payment and closing costs. In support of ongoing efforts to expand access to credit and support sustainable homeownership, Fannie Mae is offering 97% LTV /CLTV/HCLTV financing to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment, and a refinance option for Fannie Mae loans. These options are designed to help lenders serve creditworthy borrowers and expand business opportunities. Refer to Selling Guide Announcement SEL-2014-15 for details. 

Key Features (apply to all options)

  • Desktop Underwriter® (DU®) underwriting required
  • 1-unit principal residence (including condos and PUDs; manufactured housing is not eligible)
  • Fixed-rate mortgage with maximum term of 30 years
  • Reserves (if required per DU) may be gifted

fannie mae



First-time home buyer (FTHB): At least one buyer must not have owned any residential property in the past three years
(full definition).
Home-buyer education and counseling: As defined in the Selling Guide, Subpart B2-2-06: Home-buyer Education and Counseling

Selling Guide Announcement SEL-2014-15 | DU Version 9.2 Release Notes (updated December 8, 2014) |

3% Down Mortgages
3% Down Mortgages

Fannie Mae announced in Selling Guide Announcement SEL-2014-15 an increase in the maximum LTV, CLTV, and HCLTV ratios for certain principal residence transactions. Fannie Mae will allow LTV ratios greater than 95% up to a maximum of 97% for:

  • MyCommunityMortgage® (MCM®) purchase transactions if at least one borrower is a first-time home buyer and pre-purchase home-buyer education and counseling is completed,
  • standard purchase transactions (non-MCM) if at least one borrower is a first-time home buyer, or
  • standard limited cash-out refinances (non-MCM) of existing Fannie Mae loans.

All loans must be fixed-rate and secured by a one-unit principal residence. Manufactured housing is not

permitted. All loans must be underwritten with Desktop Underwriter® (DU®).


For more info please click here: FAQs



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