Getting the right mortgage

October 28, 2013

Click Image to view larger

When it comes to getting a mortgage, choosing the right type can make a difference in home affordability and determining monthly payments. Some of the options include the following:

Adjustable-rate mortgages
Typically for someone who doesn't plan to stay in their house for too long, adjustable-rate mortgages usually start off with a low rate for a certain amount of years. After the time period has expired, the interest rate will fluctuate with market trends. If interest rates rise, so will mortgage payments.

Fixed-rate mortgages
Unlike adjustable rates, fixed mortgages won't change. This type of loan is generally for a homeowner who plans to stay for a long period of time, and loans are usually applied with 15- or 30-year terms. When market changes affect interest rates, the fixed mortgage will remain the same. Payments for fixed-rate mortgages are stable and allow for homeowners to predict other expenses better.

Mortgage refinance
For homeowners with a fixed-rate mortgage, it is possible to refinance when the market changes. Refinancing can reduce monthly mortgage payments when interest rates are lower.

Interest-only mortgages
It is possible to have mortgage where a borrower only pays interest on the loan for a time period. Once the fixed term ends, the borrower must pay either a lump sum or refinance. Homeowners can benefit from this type of loan by paying less and having more cash flow each month.

VA home loan
For eligible veterans and active-duty personnel, a VA home loan requires little or no down payment and offers competitive monthly payment rates.

Jumbo loans
Homes that are more expensive may require a larger loan. Jumbo loans often have higher interest rates and down payment because they are a bigger risk for lenders. Loan limits are determined by government-sponsored enterprises Fannie Mae and Freddie Mac.

FHA mortgages
Backed by the Federal Housing Agency, FHA loans are better for borrowers with less-than-perfect credit who may not qualify for jumbo loans with private lenders. They also require a smaller down payment than jumbo loans.

Contact the Federal Saving Bank, a veteran owned back, to explore options for a low rate mortgage.

Groups join together to provide veteran housing in Houston

October 25, 2013

Click Image to view larger

The Home Depot Foundation has partnered with Houston volunteers and a group called Rebuilding Together-Houston to transform the homes of 20 veterans. As part of Home Depot's third annual Celebration of Service campaign, the volunteers planned a two-month push to finish the project, beginning in September and coming to a close on Veterans Day.

One of these veterans is Danny Britton, who served in the U.S. Air Force between 1964 and 1968. Since Hurricane Ike damaged his home in 2008, Britton has been unable to afford repairs. Health problems and a pacemaker implant surgery in 2011 required Britton to retire from his post-military position, according to The Home Depot Foundation.

The collaboration of the groups will renovate the interior and exterior of the Britton's home as well as the homes of other veterans this year. Since the Houston project started, eight homes have already been completed.

Unfortunately, many veterans face housing issues and health problems when they return home from duties. According to the Home Depot foundation, as many as 62,619 veterans were homeless in 2012.

Contact the Federal Savings Bank, a veteran owned bank, to explore affordable mortgage options for eligible veterans.

Housing finance reform on the horizon

October 25, 2013

Click Image to view larger

When the housing market collapsed in 2008, lawmakers voted to bail out government-sponsored enterprises Fannie Mae and Freddie Mac with taxpayer money. Five years down the line, Congress is making plans to reform government-backed and FHA mortgages, which currently account for 90 percent of the all mortgage loans.

According to Bloomberg, the number of private lenders for mortgages was just 14 percent in 2012. Before the recession in 2006, private sources made up 67 percent of loans, making the current balance between GSEs and private lenders unprecedented and unsustainable.

"As the housing market continues to improve, it's critical that we move beyond the stopgap solutions put into place during the housing recession and create a permanent and sustainable mortgage finance system that restores more balance between public and private credit risk," Zillow Chief Economist Stan Humphries told The Wall Street Journal.

It was irresponsible lending on the part of lenders who funded subprime mortgages to Americans who couldn't afford their homes that influenced Congress to draft proposals that would effectively shift the GSE lenders away from government control. There are a few options the government is considering to implement finance reform, each with their own set of consequences.

Reform impact on borrowers
Reform could help bring the mortgage market back to balanced lending, offering credit opportunities for a range of Americans and resulting in a more sustainable and stable housing market. However, if the government decides to completely abolish the current borrowing opportunities and credit availability for homeowners, particularly those with a lower income, the housing market may not be able to recover completely.

While reform is necessary to push borrowers away from government-backed mortgages and into the private market for economic sustainability, the effect on homeowners could mean higher interest rates and payments. With many borrowers currently enjoying the opportunity to get a low rate mortgage with interest near-historic low levels, any increase could impact the growth of the housing market as it may deter first-time home buyers from applying for a loan.

"You have to assume that almost in any future model being drafted, loans will be more expensive," David Stevens, CEO of the Mortgage Bankers Association, told Bloomberg.

GSE reform on the docket
While nothing has been set in stone for housing finance reform yet, Congress has already brought three different reform bills to the table: the Housing Finance Reform and Taxpayer Protection Act, the Protecting American Taxpayers and Homeowners Act and FHA Solvency Act of 2013.

A major consideration for all of these proposals involves consumer protection standards to keep the best interest of homeowners and borrowers in mind for long-term practices against predatory lending. With the housing market recovering and more Americans considering homeownership again, housing finance reform will lessen the uncertainty in the mortgage market. Lawmakers will have to decide on the best proposal for finance reform - one that will ensure affordable credit and mortgage refinance opportunities to Americans, require transparent regulatory lending and move toward a sustainable and stable balance of lenders.

Contact the Federal Savings Bank, a veteran owned bank, to find out more about affordable mortgage options.

Remodels on the rise

October 24, 2013

Click Image to view larger

With more homeowners able to get low mortgage refinance rates and higher property values, remodel activity has surged in 2013. According to the latest Remodeling Market Index by the National Association of Home Builders, remodeling has climbed to its highest rating since 2004. Rising two points in the third quarter of 2013, the index reached a rating of 57, indicating market activity has increased.

The Remodeling Market Index takes an average of current and future remodeling activity in the housing market. Without considering future market conditions, the current remodel rate increased from 54 points in the second quarter to 58 in the third. Current conditions reached the highest level since the initiation of the index in 2001. Any score above 50 on the index is an indicator that more remodelers are increasing market activity. 

Improved economic conditions have provided encouraging signs for homeowners who plan to remodel. The Remodeling Market Index report comes at the same time as interest rates fell to an average of 4.13 percent for a 30-year fixed mortgage, down from the previous week's average of 4.28 percent, Freddie Mac reported. With housing conditions looking better, projects that were put on hold during the recession are coming to fruition.

"The growth in home equity and home sales prompted homeowners to remodel as they prepare to move or undertake upgrades that they put off during tough times," said Bill Shaw, chairman of NAHB Remodelers.

Home sales and price gains have given a major advantage to homeowners who have seen the value of their properties increase over the last year. Heading into the winter months, when sales typically dwindle, prices are expected to rise, though at a slightly lower rate. According to the latest Home Price Index by the Federal Housing Finance Agency, prices increased 0.3 percent in August, the 19th consecutive month of growth in the housing market. With higher home equity and low cost mortgages, homeowners feel more confident about remodeling.

"In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefited from rising home values," said David Crowe, NAHB Chief Economist. "This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period."

Green Bay proposes veteran housing

October 23, 2013

Click Image to view larger

In Green Bay, WI, veterans are awaiting the start of construction on a new proposed apartment complex that will offer affordable housing for 50 individuals half a mile away from a VA clinic. The state recently passed a tax credit of $350,000 to contribute to the project, a major step toward its initial start.

When veterans return home, they often have to deal with homelessness and other housing issues associated with living in poverty. In particular, disabled veterans who may not be able to work can face extreme conditions and hardship when looking for a place to live. 

Fox News reported that the new apartment complex, called Veterans Manor, is planned on the site previously occupied by the Brown County Mental Health Center. The project will total $7.4 million and will provide both a permanent place to live and social services for 50 low-income and homeless veterans.

The project is expected to break ground in spring 2014 and be completed by the following year. The group planning to develop Veterans Manor constructed a similar project in Milwaukee.

Contact the Federal Savings Bank, a veteran owned bank, to explore affordable home loan options for eligible veterans.

Despite shutdown, VA backlog claims fall

October 22, 2013

Click Image to view larger

Despite initial predictions that the government shutdown would impact the backlog of veteran claims, the number has decreased, according to Veteran Affairs.

According to the VA, 411,704 benefit claims that have been standing for 125 days or more were reported the week after the shutdown ended. This figure represents a decline by 10,000 claims since Sept. 28, and the 15th consecutive week where backlog claims have dropped. By comparison, the VA has been able to reduce its backlog by about 31,000 claims per month since it initiated employees to work overtime in March.

"It's great to see that the government shutdown didn't stop VA's backlog progress," Jeff Miller, House Veterans Affair chairman said. "If VA's claims processing overtime program, which is now set to resume, is as crucial to success as department leaders claim it is, we expect the backlog to shrink considerably more in the coming weeks."

While the news is contradictory to previous reports, the large number of veterans awaiting benefit claims can be assured the current system and strategy at the VA is working to cut down on the backlog.

Contact the Federal Savings Bank, a veteran owned bank, to explore affordable housing option for eligible veterans.

Delayed jobs report to be released

October 21, 2013

Click Image to view larger

A week after Congress voted to end the government shutdown and pass a debt deal to raise the nation's borrowing limit, the Bureau of Labor Statistics has resumed its normal flow of data collecting and will release itsSeptember jobs report.

The report by the Bureau is largely considered the most accurate indicator of the economic recovery. Originally intended to be released Oct. 4, the jobs report was delayed 18 days due to the government shutdown, when Bureau laborers were furloughed. The report will be released Oct. 22.

Report influence
Under its current Quantitative Easing program, the Federal Reserve has maintained its monthly bond-purchasing rate of $85 billion in an effort to stimulate the economy and encourage growth in the housing market. Mortgage rates have remained low under the current program, helping first-time home buyers find a low cost mortgage. However, rates are expected to rise if the Federal Reserve decides to taper off its spending.

Fed officials have stated they will not begin to reduce spending until the national unemployment rate reaches 6.5 percent. Without a jobs report from the federal government, any decision by the Central Bank was delayed during the shutdown.

"They're going to approach each of the economic reports - no matter what the reports are representing in terms of data - with a healthy dose of caution, and that is the right approach," Tom Porcelli, RBC Capital Markets chief U.S. economist, told CNBC. "Tapering is off the table for this year. It's becoming more of a 2014 event."

The Federal Reserve will need to carefully consider how to taper its QE program in order to preserve the improvement in the housing market, where buyers have been able to take advantage of current interest rates and get a low cost mortgage.

September estimates
Without government data, economists relied on private reports during the 16-day shutdown, estimating that 180,000 private-sector jobs were added to the economy in September while the unemployment rate remained stagnant at 7.3 percent, USA Today reported.

Between June and August, the rate of employment growth slowed to an average of 148,000 more jobs each month, fewer than the 200,000 added in the first five months of 2013. Though the number is estimated to be higher in September, Federal Reserve officials hope to see 200,000 or more jobs added before reducing stimulus spending.

The shutdown also affected the release of future reports. The October jobs report, along with other Labor Department data, originally due on the first day in November was pushed back one week to Nov. 8.

Contact the Federal Savings Bank, a veteran owned bank, to discuss low rate mortgage options.

VA reopens after debt deal with record home loan guarantees

October 18, 2013

Click Image to view larger

With lender restrictions tightening over the past few years, applications for a VA home loan have exploded, reaching a record 630,000 VA loan guaranteesin 2013, The Huffington Post reported.

Home loan program helps veterans
Since the recession, the number of VA home loans has increased year after year, as veterans can benefit from getting a low rate mortgage with little or no down payment. In 2012, the VA helped 72,391 veterans retain their homes after falling under distress with their mortgages, and foreclosure rates dropped by 28 percent. At a time when lending restrictions have tightened, VA home loan eligibility has allowed many to refinance their loans and help the housing market.

The VA home loan program is reaching its 70th anniversary in 2014 and has helped guarantee more than 19.4 million homes for veterans. 

VA resumes work after government reopens
The government shutdown posed the greatest risk to veterans who were in danger of not receiving benefit checks that many use to cover their expenses. Thankfully, the shutdown ended Oct. 16 as Congress voted to pass a deal to reopen the government and extend the debt ceiling. However, the VA is now facing a backlog of benefit claims and has stated it will work to process them quickly.

"With the shutdown over, we are all very grateful that the Nov. 1 benefit checks will go out to approximately 5 million Veterans and other beneficiaries as scheduled," said Eric Shinseki,  secretary of Veterans Affairs. "We at VA are working quickly toresume normal operations in order to fulfill our solemn obligation – to ensure that Veterans receive the benefits and services they have earned through their service."

The VA was already facing a large backlog of 190,000 claims before the shutdown, leaving many employees working an average of 20 hours of overtime each week over the last six months.

Contact the Federal Savings Bank, a veteran owned bank, for information on VA home refinancing.

New data reveals housing market estimates during shutdown

October 18, 2013

Click Image to view larger

Under a federal government shutdown, the Census Bureau has been unable to release important economic data such as the most recent jobs report. In its absence, economists and lawmakers have had to rely on private reports to surmise how to the economic recovery is going and the level of impact on homeowners with a low-cost mortgage.

Private report
The National Association of Homebuilders recently released its monthly builder confidence index, revealing a slight decline in September. For newly built, single-family homes, builder confidence fell by 2 points to 55 on the index from the previous month. While any number on the index above 50 is still a good indicator that builder confidence for new homes is strong, the decline is mostly a result of the uncertainty surrounding the government shutdown and the debt ceiling deadline.

"Builder optimism remains above 50 and we are still seeing signs of pent-up demand in many markets across the country," said Rick Judson, NAHB Chairman from NC. "This slight dip in builder sentiment is the result of continuing challenges in the marketplace with regard to the cost and availability of labor and lots of uncertainty in Washington"

The NAHB survey asks builders their opinions on current sales of single-family homes, the rate of traffic from potential buyers and sales expectations in the near future.

Housing starts
Without a report from the Census Bureau, the NAHB released its housing start estimates for September in an effort to fill the data gap. Housing starts are an excellent way to gauge how the market is doing as builders provide new homes based on demand, current prices and build industry through construction and development jobs.

For September, the NAHB estimated there were between 620,000 and 630,000 housing starts on an seasonally adjusted annual rate. For multi-family starts, the estimated figure was between 255,000 and 270,000, for a total housing start rate of 875,000 to 900,000 units.

"Single-family starts dipped in July but rebounded in August, and we expect continued strength in September," said David Crowe, NAHB chief economist. "The Fed meeting in mid-September provided additional relief to builders and buyers that interest rates would remain near historic lows for the immediate future, encouraging consumers back into the housing market.

Market health after shutdown
While the market is currently in flux during the shutdown, the impact on the housing market and mortgage rates will likely be minimal. Builder confidence has dipped slightly, but the NAHB expects the market conditions will remain normal and continue to improve after the shutdown ends. Borrowers can be confident the housing market will recover quickly once the government shutdown ends.

"A spike in mortgage interest rates along with the paralysis in Washington that led to the government shutdown and uncertainty regarding the nation's debt limit have caused builders and consumers to take pause," said Crowe. "However, interest rates remain near historic lows and we don't expect the level of rates to have a major impact on sales and starts going forward. Once this government impasse is resolved, we expect builder and consumer optimism will bounce back."

Contact the Federal Reserve Bank, a veteran owned bank, to explore affordable mortgage options. 

Rising rates leaves window of opportunity for buyers

October 17, 2013

Click Image to view larger

Leading up to the debt ceiling deadline, mortgage rates increased slightly - before Congress voted to extend the debt limit and reopen the federal government - from an average of 4.23 percent of 4.28 percent, according to Freddie Mac. Private data reports revealed the shutdown and threat of default did have a negative effect on the mortgage market, but are expected to be short-lived. 

"On the bright side, these fiscal policy issues appear to have had onlyminimal effect on the housing market to date, which continues to improve overall," said Fannie Mae Chief Economist Doug Duncan. "Notably, the rapid appreciation of home prices during the past year has contributed significantly to household net worth gains and may help to cushion some of the fallout from the fiscal policy debate. Also, the Fed's continuation of securities purchases will likely keep mortgage rates low, enabling more homeowners to take advantage of refinance opportunities."

While the Central Bank continues its monthly bond-purchasing, borrowers can be assured of the best mortgage refinance rates, but will probably see them increase once stimulus money is tapered off in 2014. With federal institutions open once more, the Census Bureau will be able to release important economic reports that will provide the Federal Reserve crucial information regarding the recovery. Borrowers have a window of opportunity to apply for a new home purchase loan before rates rise next year.

Relaxed requirements
While interest rates rose slightly, the average credit score for mortgage requirements was reduced in September, makingmore borrowers eligible for loans, MarketWatch reported.

When the recession was at its worst, lenders tightened their credit requirements for long-term mortgages in an effort to improve the health of the market and provide loans that were likely to be paid back. With the economy improving and gains in the housing market made over the last year, lenders are relaxing standards slightly to continue the recovery.

The relaxed requirements are still high standards historically, with credit approval ratings remaining high. Before the recession, borrowers were able to get mortgages with credit scores of 600 and below, according to MarketWatch. Now, lenders require a score closer to 700 or greater to be approved.

The change is also intended to boost mortgage applications while borrowers can still apply for a low rate mortgage. When mortgage rates were at their lowest point, around 3.5 percent, applications jumped, but declined after rates increased by about 1 percent in May. According to the latest survey by the Mortgage Bankers Association, applications decreased over the last week by 0.3 percent. However, mortgage refinance applications accounted for 66 percent of all mortgage activity, up from 64 percent the previous week.

Freddie Mac reported that mortgage applications rose for in October, driven by mortgage refinance rates. Although consumer and builder confidence fell to a low point, the mortgage market has been able to power through the debt threat and shutdown with only short-term consequences.

"Recent confidence measures depict some of the effects of the government shutdown and uncertainty of the budget impasse," said Frank Nothaft, vice president and chief economist at Freddie Mac. "For instance, consumer sentiment in October fell for the second straight month to the lowest reading since January, according to the University of Michigan... However, despite these downturns in confidence, mortgage applications rose for the second consecutive week as of October 11th, elevated by increases in applications for refinancing."

Contact the Federal Savings Bank, a veteran owned bank, to discuss mortgage refinance options.

Thousands of loan modifications reported in August

October 16, 2013

Click Image to view larger

HOPE NOW, a voluntary alliance group that works with private lenders and mortgage insurers, has helped homeowners complete permanent loan modifications since 2007. During the recession, a large quantity of homeowners fell under the water line due to an inability to make mortgage payments. Some even ended up with mortgages that were higher than what their property was worth when home prices crashed during the financial crisis.

A new report by the alliance group revealed that 67,000 loan modifications were completed in August, bringing the total number of homeowners who were able to get a new mortgage refinance rate to 580,000 for 2013.

"HOPE NOW is pleased to report that since 2007, more than eight million permanent, non-foreclosure solutions have been completed by our members, on behalf of homeowners across the country," stated Eric Selk, executive director at HOPE NOW.

In addition to working with lenders and mortgage servicers to find low cost mortgage options for homeowners, HOPE NOW works with military partners to find VA loan refinance options. Borrowers who are unable to make their mortgage payments should seek loan modification options for a low rate mortgage payment. With more homeowners completing loan modifications, delinquent mortgages are likely to decrease, and the health of the housing market should improve.

Contact the Federal Savings Bank, a veteran owned bank, to explore loan refinance availability.

Long-term default deadline consequences

October 15, 2013

Click Image to view larger

As the deadline over the nation's debt limit creeps closer at an alarming rate, the consequences of a default have become clear.

Fed taper
Multiple news sources have reported that the Federal Reserve will not taper its monthly bond-purchasing levels of $85 billion in stimulus if the nation defaults on its debts. In fact, it would be near impossible, as the effects of the default would have far-reaching economic consequences affecting unemployment levels and the value of the American dollar.

While economic data has not been reliable during the government shutdown, Federal Reserve officials have noted that they feel better prepared in the case of a default than they were in 2011, when the debate over the debt ceiling led to a downgrade from the nation's AAA credit score.

"I'm more confident that we, my colleagues and I, are better prepared than we were in 2011," Richard Fisher, Dallas Fed president, told Reuters.

Mortgage rates
MarketWatch reported that if the nation were to default on its debt, mortgage rates would be impacted immediately, rising as the value of American currency drops. However, rates may not increase in a way that would majorly affect homebuyers and the housing market in the long run.

Several factors would have to occur for rates to spike for longer than a few days and impact the mortgage market. Default is unprecedented in the nation's history, and most economists believe Congress will vote to extend the debt limit at the last minute. It is unlikely that no action will take place. Mortgage rates might jump initially if there is a default, but Congress will probably take steps to quickly address the debt ceiling after the deadline. The only way rates would remain high is if there is no action to reverse a default, MarketWatch reported.

The stock market doesn't appear to be anticipating a default, as prices have not dropped, but seemed to have a positive outlook before the debt ceiling deadline. Treasury bonds would be affected by a default by decreasing in value as they become riskier investments.

"In the event of an actual default, Treasury yields and other borrowing costs would probably rise and remain higher," Julian Jessop, Capital's chief global economist, told NBC News.

Borrowers and first-time homebuyers have been expecting rates to rise in the next year, as the Federal Reserve has been waiting on certain economic indicators to improve before tapering and influencing rates to increase. Investors might be fearful that the U.S. will be unable to pay on its short-term treasuries, but debts that are due later may be safer. Long-term treasury yields would be the most protected, and 30-year fixed mortgages would therefore be less likely to be affected than loans with shorter terms.

Contact the Federal Savings Bank, a veteran owned bank, to explore mortgage refinance options.

New veteran housing in Poughkeepsie, NY

October 15, 2013

Click Image to view larger

In the city of Poughkeepsie, NY, a new housing initiative has provided veterans and senior citizens a place to call home. When veterans return home, they often face a range of challenges that can affect their ability to own and maintain a house, and unfortunately a number end up without a home at all.

A new housing building named the Poughkeepsie Commons has 24 available apartments for veterans at discounted rents under $500 per month, according to the Poughkeepsie Journal. With an almost constant demand for veteran housing, the Dutchess County of Veteran Services was able to help 73 veterans and their families who were either homeless or at risk of losing their home last year, reported the Journal. The number of veterans who have applied for a VA home loan has tripled since 2007 in response to the need for affordable housing and the options available for a low rate mortgage, according to Fox Business News.

"Poughkeepsie Commons helps answer a profound need for veterans housing in our region," Sean Kearney, the project developer, told the Poughkeepsie Journal. "In addition to providing much-needed affordable housing for the most vulnerable veterans, Poughkeepsie Commons will provide access to counseling, transportation and other supportive services."

In order to be eligible for the Poughkeepsie Commons housing initiative, veterans must not have left the army with dishonorable discharge and must make less than 50 percent of the median income in the county. The Poughkeepsie Journal reported that all veterans who were eligible for the program were housed last year.

"As our veterans return to our community from their service and our senior population grows and ages, it is vital that we provide affordable housing which meets their unique needs," Dutchess County Executive Marc Molinaro told the Poughkeepsie Journal at the grand opening of the new commons.

Contact the Federal Savings Bank, a veteran owned bank, to discuss affordable mortgage options for veterans.

Fannie Mae changes mortgage loan restrictions

October 14, 2013

Click Image to view larger

The housing market, a major contributor to the economic recovery, has seen steady improvement with the help of low rate mortgages and inexpensive down payments, encouraging borrowers to make a new home purchase. However, government-backed mortgages with Fannie Mae will soon undergo new changes through the Desktop Underwriter (DU) loan approval system. The DU system is an automatic program that has followed strict guidelines in the past, without input from lenders. The new changes will increase flexibility for certain borrowers, but will make it harder for others to qualify due to loan limits, restrictions and more costs.

Distressed borrowers
For borrowers who have gone through a foreclosure, there is usually a waiting period up to seven years before they are qualified for a new loan. However, when foreclosures were at their highest levels during the recession, many homeowners sold their properties before it was foreclosed on completely.

Though they may not have gone through a foreclosure, these pre-foreclosure sales have excluded some from getting another loan because of credit reports, according to HousingWire. The distinction is more of a technical error through the DU program, and will be changed in November so that homeowners who underwent pre-foreclosures will not be subject to a seven-year waiting period before applying for another loan. The mandatory waiting period for a borrower with a pre-foreclosure sale on their credit report is two years.

"Definitely, there were credit reports showing that even if it was a short-sale, or a pre-foreclosure, it was reading as an actual foreclosure," John Walsh, president of Total Mortgage, told HousingWire. "The only way to override it is to do a manual overwrite to Fannie, which nobody does that."

Higher costs
The current down payment for Fannie Mae conforming loans is 3 percent, but will increase to 5 percent for loans submitted after November 16, Mortgage News Daily reported. Some homeowners may not be able to afford 5 percent on a down payment, and many were attracted to Fannie Mae loans because the cost was so low.

The increase could deter some first-time home buyers from applying for a Fannie Mae loan. However, these loans will not have upfront mortgage insurance costs, unlike current loans with a 3 percent down payment and FHA mortgages. In addition to higher down payments, loan limits have been reduced so that no mortgage can have terms longer than 30 years, as opposed to 40.

Contact the Federal Savings Bank, a veteran owned bank, to find affordable mortgage options.