Do I need 3% or 20% down to buy a house after the Dodd-Frank mortgage law?

3%.  Starting in 2015, recent rule changes may let you buy a home with 3% down instead of the 20% required over the last few years.

This isn’t really a bankruptcy question, but I was asked this question last night.  Remember that if you are filing bankruptcy and trying to buy a h3 percentome, it will be about 2.5 years until you’ll be able to finance a home with an FHA type loan.  This is a different question though.

After the housing bubble collapse and the last 6 years of housing market mess, mortgage lenders tightened up their rules for buying homes, often requiring 20% down along with other qualifications for homebuyers.  According to the Wall Street Journal, “U.S. Agencies Approve Relaxed Mortgage-Lending Rules.”  The “relaxed” rule was a change requiring that lenders be less strict on homebuyer qualification requirements.  In other words, “Low Down Payments Are Coming Back,”

On Monday, Federal Housing Finance Agency Director Mel Watt announced that mortgage-finance companies Fannie Mae and Freddie Mac would start backing loans with down payments as low as 3%.

And on Tuesday, three federal agencies approved a loosened set of mortgage-lending rules, removing a requirement for a 20% down payment for a class of high-quality loan known as a “qualified residential mortgage.”

Loans with little to no down payment were a common feature of the lax lending practices that were prevalent during the housing market’s bubble years.

This is great news for people who want to buy a home.

It is also a little scary, since easier home-buying led in part to the mortgage crisis.  According to one of the SEC Commissioners who objected to the rule change,

“Today’s rule-making takes the untenable housing policy that injected irrational exuberance into mortgage lending and, as a result, caused a catastrophic financial crisis and chisels that failed policy into the stone tablets of the
code of federal regulations,” said Mr. Gallagher.