As prices rise, mortgage lenders are making it easier to buy a house

Mortgage
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Guild Mortgage’s program was welcomed news for winery owner Mark Blanchard and his wife, Kalle, a nurse.

Despite making a decent living, the couple estimated they would wipe out their savings if they put 20% down on a home in Healdsburg, a Sonoma County town that’s a hot spot for tech workers to purchase a second house.

So this year, they put only 1% down to purchase a more than $400,000, three-bedroom townhouse a short walk from downtown.

“This really was a dream come true for us, as locals, to buy within our own community,” the 38-year-old Blanchard said. “The response from my peers … was how is that possible? How did you buy in this town?”

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Another recent change affects how much debt a prospective borrower is allowed to carry as a percentage of their gross income.

After the housing crisis, Fannie Mae established a debt-to-income cap of 45%, except for those who put at least 20% down and could show they had enough savings to pay their mortgage for 12 months if they lost their job. Exceptions were also made if a borrower received income from someone who lived in the house, but was not on the loan.

Last month, Fannie did away with those special requirements, raising its cap to 50%.