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The United States Housing and Economic Recovery Act of 2008 (commonly referred to as HERA) was designed primarily to address the subprime mortgage crisis.It authorized the Federal Housing Administration to guarantee up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders wrote down principal loan balances to 90 percent of current appraisal value.
Each year, Fannie Mae and Freddie Mac set a baseline conforming loan limit, adjusting it for high-cost areas. For 2025, the baseline limit is rising from $766,550 to $806,500.
Fannie Mae's 2014 financial results enabled it to pay $20.6 billion in dividends to Treasury for the year, resulting in a cumulative total of $134.5 billion in dividends through December 31, 2014 – approximately $18 billion more than Fannie Mae received in support.
On average, the down payment amount is $6,624. FHA borrowers have an average debt-to-income ratio of 40.34%, and the typical FHA loan amount is $191,650. It's worth noting that a minimum credit score of 580 with a down payment of 3.5% is required to qualify. [25]
FHA loans require a minimum FICO score of 580 to qualify for 3.5% down or 500 for 10% down. [ citation needed ] Additionally, the lender checks the financial history of the person getting the loan to see whether they have been delinquent on loans owed to the U.S. government; if they are, they do not qualify for a FHA loan.
"Over the past decade Fannie Mae and Freddie Mac have reduced required down payments on loans that they purchase in the secondary market. Those requirements have declined from 10% to 5% to 3% and in the past few months Fannie Mae announced that it would follow Freddie Mac's recent move into the 0% down payment mortgage market." [153]
In the United States, down payments for home purchases typically vary between 3.5% and 20% of the purchase price. [1] The Federal Housing Administration has advocated lower down payments since its inception in 1934, and, currently, borrowers that qualify for an FHA loan pay only 3.5% for a down payment.
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