This is big news, and it’s good news, and like most big good news about Las Vegas real estate, it got buried and is not being reported.
In December of 2007, Fannie Mae increased the down payment requirement on all Las Vegas mortgages by (I believe) 5%. This was a BIG deal. It dramatically increases the amount of cash that must be brought to the closing table. Fannie Mae did this because they felt Las Vegas was a “declining market”, which it was.
Last Friday, however, Fannie Mae repealed that requirement, creating a single national LTV standard for all mortgages.
As another part of our ‘Keys to RecoveryTM‘ initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions,” Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said.
For single family, primary occupancy, Fannie Mae is accepting 3% down payments in Las Vegas if the application qualifies for their automated process, and 5% down payments otherwise.
It sounds like big political pressure was brought to bear on Fannie Mae, but any way you cut it, this is a huge piece of positive news. It kicks in on June 1.