If you have been watching the news, you may have heard that Fannie Mae/Freddie Mac are loosening the reins on their mortgage lending guidelines. In reality, most of what is happening is clarification around existing guidelines.
Most lenders when they originate a loan basically borrow the money from Fannie/Freddie to lend rather than using their own money. Yet, in order to do so they must meet certain criteria laid-out by Fannie/Freddie. If a lender fails to meet these standards they can be fined or could even end-up holding the loan on their own ledger. Since the guidelines were perceived to be a bit ambiguous, lenders started interpreting these rules for themselves-resulting in variations in lending requirements across the industry. Obviously this was not what Fannie/Freddie intended, so back in October they agreed to provide clarification.
What does this mean to you? Really what you will see is more consistency around lending practices as you consider financing options, especially at the mid/lower 600s credit score range. As always, I encourage anyone looking at a loan to evaluate multiple lenders to make sure you are getting the program you think you are before you sign on the dotted line.