Inventory
info icon
Single family homes on the market. Updated weekly.Powered by Altos Research
735,718-296
30-yr Fixed Rate30-yr Fixed
info icon
30-Yr. Fixed Conforming. Updated hourly during market hours.
6.94%0.01
Real Estate

Fannie Mae expected to soon introduce new construction loan program

Looks to increase affordable housing inventory

Mortgage giant Fannie Mae could be on the verge of introducing a pilot program to change the way it buys residential construction loans.

The GSE could implement these programs in order to help with the lack of affordable homes available for sale, according to an article by Joe Light for Bloomberg.

Fannie Mae could now be looking at moving up the sale of the construction loan, in order to finalize the sale, according to the article.

From the article:

For its first pilot program, Fannie is trying to eliminate some of the hurdles borrowers face in constructing a home. Typically, if a borrower hires a builder, he or she gets a temporary loan from a bank. When the home is complete, the bank or another lender can then refinance the loan into a mortgage.

Lenders can also make a mortgage with the intention of selling it to Fannie, but they aren’t able to do so until the home is finished. Lenders don’t always want to take that risk with new construction because it can force them to hold a loan on their own books for months.

Under the new program, Fannie Mae would buy the loan on the first day of construction, possibly making the loan easier to get and cheaper. The borrower wouldn’t begin making payments until after they moved into the home.

Land Gorilla, a construction loan management software company, explained this could bring major change to the construction lending industry.

Most Popular Articles

Latest Articles

Lower mortgage rates attracting more homebuyers 

An often misguided premise I see on social media is that lower mortgage rates are doing nothing for housing demand. That’s ok — very few people are looking at the data without an agenda. However, the point of this tracker is to show you evidence that lower rates have already changed housing data. So, let’s […]

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please