Fannie Mae declining markets announcement

According to an announcement this morning released by Fannie Mae, effective June 1, 2008 they will be decreasing the minimum down payment required in markets that are declining.
 
As a result consumers may purchase an owner occupied property in a declining market with as little as 3% down.    Down payment requirements will vary for other occupancy, property and transaction types. The new policy supersedes the policy established in December 2007 requiring a higher down payment in markets where home prices are declining.
 
There are a number of questions that we are in the process of getting answers to from the investors we sell loan to such as:
 
1)  When will they adopt the policy?
2)  Will the price be adjusted for loans in declining markets, in other words a higher rate to the consumer as a result of the risk associated?
3)  Will their be increased appraisal requirements in declining markets at higher loan to values?
 
We will post updates as we get them.
 

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