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New lending guidelines moving towards helping borrowers

Fannie Mae's new lending guidelines will help borrowers.

Fannie Mae's new lending guidelines will help borrowers.

Fannie Mae recently released new lending guidelines that will make attaining a mortgage much easier for borrowers, especially upgrade buyers and young couples, according to a New York Times report.

The outline of the guidelines, to be implemented on December 13, will grant buyers the ability to use gifts and grants from nonprofit groups for their minimum 5 percent down payment, according to the report.

However, the report indicates that the new guidelines may be negated somewhat because many lenders are requiring 10 percent down. “This is definitely going to help upgrade buyers and young couples who for whatever reason don’t have enough money and are getting some from their families,” Edward Ades, the owner of Universal Mortgage told the paper.

Additionally, the report says the gift portion of the rules pertain strictly to single-family principal residences, such as town houses, co-ops and condominiums, also covering mortgage amounts that exceed 80 percent of a property’s value. Furthermore, a limit on loan balances is noted, such as $729,000 in more expensive areas like New York City, and $417,000 in other areas, says the report.

Officials with the National Association of Realtors have been trying to get lenders to loosen their credit standards, saying that they are too restrictive.