In an effort to make homeownership more affordable, mortgage giants Fannie Mae and Freddie Mac announced programs to purchase mortgages with down payments of as little as three percent. These programs went into effect on Saturday, and they are aimed at first-time home buyers in particular.

“NAHB commends Fannie Mae and Freddie Mac for instituting new loan guidelines that will allow creditworthy borrowers to obtain mortgages with a down payment of three percent. One of the biggest obstacles to achieving homeownership is the ability to come up with a down payment,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB). “By reducing upfront cash requirements while establishing tough but fair underwriting guidelines that include a number of safeguards, Fannie and Freddie will open the door to homeownership for more American families, particularly first-time home buyers and younger households.”

The amount of first-time home buyers currently in the market is down to its lowest level in 27 years according to recent data released by the National Association of Realtors, as they account for just 33 percent of all home purchases. By lowering the down payment amounts, which is attributed as one of the major factors slowing Millennial home purchases, Fannie Mae and Freddie Mac hope to increase the number of first-time home buyers in the market.

According to Fannie Mae and Freddie Mac, borrowers must have a credit score of at least 620 to be qualified for a three percent down mortgage. They must also be able to prove income, assets and job status, and they must purchase private mortgage insurance (PMI).

With the new three-percent down payments, buyers that qualify for a $200,000 home will now be able to put down as little as $6,000 on a traditional 30-year fixed-rate mortgage.

For more information on these mortgage options, visit www.FannieMae.com or www.FreddieMac.com.