The idea of introducing 50-year mortgages as a potential tool to address housing affordability has hit a pause, as the U.S. Department of Housing and Urban Development signals that more research is needed before pursuing such a significant change to federal housing policy. HUD Secretary Marcia Fudge recently indicated that while extended-term mortgages have been discussed as a way to lower monthly payments, the agency is not prepared to move forward without a deeper understanding of the long-term implications for borrowers and the housing market.
As the Federal Reserve signals that interest rate cuts are likely ahead, many prospective homebuyers are wondering what those changes could mean for mortgage rates and housing affordability in 2026. After years of elevated borrowing costs that reshaped the housing market, economists and housing experts say rate cuts may offer some relief — but not the dramatic reset many buyers are hoping for.
After several years of rapid appreciation that strained household budgets and sidelined many potential buyers, the U.S. housing market is expected to enter a period of slower home price growth that could gradually improve affordability by 2026. Economists and housing analysts say cooling price trends, combined with stabilizing interest rates and modest income growth, may help restore balance to a market that has remained stubbornly out of reach for many would-be homeowners.
The U.S. Department of Housing and Urban Development has released its annual update to Federal Housing Administration loan limits for 2026, increasing both forward mortgage ceiling amounts and the maximum claim amount for Home Equity Conversion Mortgages. The adjustment reflects continued home price growth across much of the country and is intended to preserve access to FHA-insured financing for borrowers in a wide range of housing markets while keeping federal programs aligned with current market realities.
In a much-anticipated move late this week, the Federal Reserve lowered its benchmark interest rate by a quarter of a percentage point for the third time this year, a decision that financial markets, loan officers and households have been watching closely. The Federal Open Market Committee’s action, which reduced the federal funds rate to a range of roughly 3.5 %–3.75 %, was aimed at supporting a slowing economy and easing borrowing costs.
Fannie Mae and Freddie Mac reported positive financial results for 2021 and were able to add to their net worths by not having to pay dividends to the U.S. Treasury. Fannie Mae reported annual net income of $22.2 billion, nearly double the $11.8 billion it earned in 2020. The company said the increase was driven primarily by a shift from credit-related expense to credit-related income, higher net interest income, and a shift from fair value losses to fair value gains.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
Freddie Mac announced several recent updates to its Selling/Servicing Guide, including the option of using desktop appraisals for mortgages that meet certain requirements. The change to the desktop appraisal option is “based on the success of the temporary COVID-19 appraisal flexibilities and a market appetite for appraisal options that do not require physical inspections,” Freddie wrote in its latest bulletin.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
Fannie Mae economists expect a “new normal” for the housing market in 2022 as the unprecedented market disturbances and policy responses stemming from the COVID-19 pandemic subside. In its January 2022 commentary, Fannie’s Economic and Strategic Research Group said that economic growth will return to more modest levels consistent with the long-run trend, while home sales and house price growth will slow to a more sustainable pace.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
The Federal Housing Finance Agency (FHFA) has informed Fannie Mae and Freddie Mac that their Duty to Serve plans are insufficient and will need to be revised. The agency said that neither enterprise’s plans, which were published in May, meet the standard for any of the three underserved markets targeted by the Duty to Serve Program.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
The Federal Housing Finance Agency (FHFA) is expanding eligibility for its refinance programs and incorporating desktop appraisals into the GSE Selling Guides. The agency made the announcement last week, promoting the measures as a way to advance two of its goals under the Biden administration: making housing more affordable and home ownership more sustainable.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
Fannie Mae will soon allow borrowers to fulfill their homeownership education requirements through third-party providers, independent of lenders. Fannie announced the change in its latest Selling Guide update. Other changes include the removal of constant maturity treasury indexed-ARMs and the replacement of references to the Software Subscription Agreement Master Terms and Conditions with a new Consolidated Technology Licensing Guide.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
A group of U.S. Senate Democrats has introduced legislation to create a special 20-year mortgage for certain first-time buyers. The Low-Income First Time Homebuyers (LIFT) Act would establish a program through Ginnie Mae, in which the U.S. Treasury would subsidize the interest rate and origination fees on a 20-year mortgage.
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In what is potentially good news for mortgage processors and underwriters, home buyers and sellers, and mortgage lenders, are expressing slightly higher optimism about the near term. According to the latest Fannie Mae Home Purchase Sentiment Index released last week, there is a greater share of consumers who believe it’s a good time to buy a home.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
President Joe Biden made it clear before winning last year’s election that his main housing goal was making it easier for lower income people to qualify for mortgage loans. In The Biden Plan for Investing in Our Communities Through Housing that was posted online during the campaign, Biden pledged to allocate $640 billion over 10 years “so every American has access to housing that is affordable, stable, safe and healthy, accessible, energy efficient and resilient, and located near good schools and with a reasonable commute to their jobs.”
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
Fannie Mae will launch a feature next month that will incorporate rent payments into the credit evaluation process. Beginning September 18, 2021, Fannie Mae’s Desktop Underwriter (DU) will enable single-family lenders – with permission from mortgage applicants – to automatically identify recurring rent payments in the applicant’s bank statement data to deliver a more inclusive credit assessment.
Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.
Written By: Bonnie Wildt
I have said it before and I will say it again and that is, do not believe everything you hear or read for that matter. In this particular instance I am referring to AUS Findings. I have had countless conversations with processors and loan officer who want to know why I am asking for documentation that the AUS findings have clearly stated wasn’t needed or worse, they can’t believe I am turning a loan down that has an Approve/Eligible. So here it is again and pay particular attention to the details because just because you have an Approve/Eligible or Accept doesn’t necessarily mean you have a done deal.