Back in 1999, Fannie Mae introduced a pilot program that lowered the credit requirements on loans that it would purchase from banks and lending institutions. The program was is intended, in part, to increase the number of minority and low income home owners who tend to have lower credit ratings than non-Hispanic whites.
The pilot program started with 24 banks in 15 markets and expanded nationwide in less than one year. However, even back in September 1999 there was concern that Fannie Mae, a government-subsidized corporation, could run into trouble in an economic downturn. And if that happened it would prompt a government rescue similar to that of the savings and loan industry in the 1980’s.
With the recent problems in the financial markets and the government’s proposed $700 Billion bailout package, it looks like history may be repeating itself like it did with the savings and loan crisis of the 80’s.
What can you do as a real estate investor today? Well, if you have good credit and the funds to invest, now is a good time to find all kinds of great real estate deals coupled with low interest rate financing. If you’ve been sitting on the fence then take action today.