Getting a mortgage will become even more difficult

Fannie Mae, one of the nation’s mortgage giants, announced new lending restrictions that might make it even more difficult for some homebuyers to qualify for a loan.

New applicants and homeowners looking to refinance may find they have to meet more stringent standards, such as in meeting new loan-to-value ratios in qualifying for a mortgage.

For example, Fannie announced that the maximum loan-to-value ratios permitted will now be 90 percent, down from 97 percent. Fannie, a government sponsored enterprise (GSE) also says that some loans will now require higher credit scores. For example, borrowers who are applying for an adjustable-rate loan will need a credit rating of 640-which is up from 620.

Also, self-employed applicants may be required to supply more tax information, such as two years of tax returns to verify their income.

“This can knock a decent portion of borrowers out of the picture who had a rough year in business two years ago,” says Matt Hackett, underwriting manager at New York lender Equity Now Inc. “You’d be surprised how much of an effect this has.”

Fannie Mae, along with fellow GSE Freddie Mac, back about two-thirds of all new mortgages.