Fannie Mae reported its share of lower down payment loans is on the rise as FHA-which used to be one of the only agencies to offer low down payment loans-is seeing its market share shrink as it raises its premiums.
Homebuyers may be able to qualify with lower down payments-a big shift from the past four years when 20 percent down payments on a loan were practically required.
"In general, lenders have been willing to do more than they may have been willing to do in the past," says John Forlines, chief credit officer for Fannie Mae's single family business.
Loans with between 3 and 10 percent down payments accounted for 18 percent of Fannie Mae's business for home purchase loans in the third quarter of 2012, the latest data available. These loans do require private mortgage insurance.