Dive Brief:
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Homebuyers who qualify for mortgages will no longer have to come up with hefty down payments, thanks to a move by federal regulators to ease lending rules.
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Fannie Mae and Freddie Mac will start guaranteeing loans with down payments of as little as 3%, the Federal Housing Finance Agency announced Monday.
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The Federal Housing Finance Authority said Tuesday it will release details about what would cause the two mortgage creditors to require a bank to buy back a risky loan. The clarification could lead banks to loosen lending standards.
Dive Insight:
The news is good for homebuyers, who could more easily qualify for mortgages that have been hard to get since the recession, and for homebuilders, who might sell more new houses as a result. Still, critics note that low down payments and easy-to-qualify-for mortgages contributed to the 2007 housing and financial crises.