Looser credit for home buyers

The New York Times reports on new changes in mortgages and credit that will put homeownership within reach of more people.

The coming reduction in insurance premiums on mortgages backed by the Federal Housing Administration will make these loans more attractive to the most creditworthy, lower-risk borrowers, according to an analysis by the Urban Institute’s Housing Finance Policy Center.

The F.H.A., which secures loans with down payments as low as 3.5 percent, plans to cut the annual premiums charged to borrowers by 0.5 percentage point, effective Jan. 26. The reduction comes as Fannie Mae and Freddie Mac are extending credit to a similar audience with new conforming mortgage programs that allow as little as 3 percent down.

[Read this article]