In support of ongoing efforts to expand access to credit and support sustainable homeownership, Fannie Mae will offer up to 97% Loan-To-Value (LTV) financing, effective December 13, 2014, to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment, and to support refinance of existing Fannie Mae mortgage loans. 

Such ratio is even higher than FHA’s 96.5% LTV or 3.5% down payment.  One may wonder if the real estate market ever adjusts downward, such tiny down payment would be easily wiped out.  What exactly are we trying to achieve?