Fannie and Freddie's new home loan rules - you need lots of cash

We've all heard that it's getting harder and harder to qualify for a new loan, but no one's been certain exactly what Fannie Mae and Freddie Mac have set as rules in this new financial environment.

In a story in today's Wall Street Journal, we find that a borrower needs a credit score of at least 740 to qualify for a home-purchase loan with a 20% down. With that excellent credit score the borrower could qualify for a loan rate of 4.75% plus a 1% origination fee. If a borrower's credit score is below 680, then the best he or she could do would be a 4.75% loan with 2.5% in fees.

So what do you need in cash to buy a home today using Fannie or Freddie? if you've got a score of 740 or higher and want to buy a home valued at $200,000, you would need to have $40,000 to put down on the home plus another $2,000 for fees before you could even think about buying. If your credit score was below 680, you would need the $40,000 down plus $5,000 in fees.

The only way you might find a way to purchase a home with less cash up front would be to work with the FHA. The FHA is still accepting borrowers with low credit scores and down payments of as little as 3.5%.