The new program lets homebuyers put down as little as 3%.
Irvine, Calif., Jan. 26, 2015 /PRNewswire/ -- South Pacific Financial Corporation (SPFC) has announced the availability of the new Fannie Mae conventional 97% loan-to-value program.
This conventional program will help homebuyers who would otherwise qualify for a home mortgage but may not have the financial resources to make a large down payment.
“There’s a misconception that all conventional mortgage loans require a 20% down payment,” said SPFC CEO John Johnston. “That’s not so and we’re excited to offer this loan to prospective homebuyers.”
According to consumer research conducted by Fannie Mae, the primary barrier to homeownership for first-time homebuyers is saving money for down payments and closing costs.
This constraint on first-time homebuyers is evident in the housing market. According to NAR’s 2014 Profile of Home Buyers and Sellers, the share of first-time buyers fell from 38% in 2013 to 33% in 2014, the lowest level in 27 years.
The situation is even worse when it comes to new home sales. According to the National Association of Home Builders, normally about 29% of the new homes are sold to first-time homebuyers. Currently, that number is 16%, nearly half the usual rate.
“This program is significant because too many first-time homebuyers are feeling locked out of the housing market,” said Dan Malouff, SPFC Executive Vice President of Capital Markets.
In addition, eligible homeowners who have a Fannie Mae-owned loan can refinance their loan up to the 97% LTV level under a limited cash-out option.
“Our new 97% LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage,” said Fannie Mae Executive Vice President Andrew Bon Salle. “We are confident that these loans can be good business for lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers.”
“When Fannie Mae launched this product, they were concerned that mortgage companies might not participate,” said Johnston. “We saw this as a bold move on behalf of Fannie and so decided we wanted to participate.”
About South Pacific Financial Corporation
Founded in 1982, Irvine, CA-based South Pacific Financial Corporation (SPFC) offers a diverse array of mortgage loan programs, including Conventional, Jumbo, FHA, VA and USDA loans at competitive rates. At SPFC, we understand that we reach our goals by helping others reach theirs. Our core values are to do what is just, right and fair for our customers, employees, and business partners, while trusting them to do the same in return. In Mortgage Executive Magazine (2014), SPFC was voted one of the 50 Best Mortgage Companies to Work for in America.
For more information on SPFC, call (949) 365-4959 or visit www.spfcnet.com.