San Diego real estate blog - Peter Toner

The rumor is true. Fannie Mae has done away with their previous high          down-payment requirements for distressed markets. They are now          accepting down-payments from 3-5% for all loans that it guarantees for homes in areas of declining value! Fannie Mae hopes that in changing their down-payment policy it will in turn encourage those buyers who are sitting on the fence to go out and place an offer on a home. They also are no longer defining these areas by zip code, but instead are now going off of appraiser recommendations for what areas are considered distressed. This change may come as good news to homeowners who fear their home value may have been declining due to distressed neighborhoods in the same zip code.