Fannie Mae Tightens Mortgage Standards for Some Home Buyers

Fannie Mae Tightens Mortgage Standards for Some Home Buyers

Bloomberg News (8/23, Shenn, 1M) reports, "Fannie Mae, the largest source of money for U.S mortgages, told lenders that it's tightening some of its qualification standards for people buying homes or refinancing loans. The changes include a reduction of the maximum loan-to-value ratios for some adjustable-rate mortgages to 90 percent, from as much as 97 percent, and an increase in required credit scores for certain loans," the GSE said on its website. The firm will also begin requiring more tax returns from self-employed borrowers. Fannie Mae is quoted as saying, "The new approach 'provides more transparent requirements with regard to how compensating factors must be applied.'" But, Matt Hackett, underwriting manager at New York lender Equity Now Inc., said that the changes could keep many potential buyers from the market.