Recent changes to Fannie Mae and Freddie Mac are designed to ease some of down payment requirements, credit score limits and paperwork requirement that have kept some buyers out of the market. Both lenders are now authorized to offer loans with down payments of just 3 percent. The low down-payment mortgages from Fannie will be available only to people who are defined by the Federal Housing Finance Agency as first-time homebuyers, meaning they have not owned a home in the last three years.

Freddie’s program offers low down-payment options to repeat buyers with low or moderate incomes. Freddie Mac also offers no-cash-out mortgage refinancing and requires all first-time borrowers to go through home ownership counseling. Fannie Mae’s guidelines requires counseling for low and moderate-income buyers and allows borrowers to count cash gifts as financial reserves. Fannie also offers a limited cash-out option to cover closing costs.

In January, most mortgages issued by Fannie and Freddie went to borrowers with average credit scores of at least 731 out of 850, according to the Ellie Mae Origination Insight Report. Refinancing represented a much more significant portion of loan activity than in recent months. Approximately 51 percent of all loan volume in January involved some form of refinancing activity, up 8 percent from December to the highest level since 2013. The closing rate for all mortgage loans also rose, going up to 62.4 percent.

New guidelines that took effect in early December clarify the credit approval threshold for Fannie and Freddie at 620, erasing some of the uncertainty on the part of lenders, who may have been reluctant to approve loans to people with subprime scores. However, high FICO scores still matter. In January, only 30 percent of closed loans had a FICO score below 700, a drop from 32 percent in January 2014. Borrowers who were denied loans had an average FICO score of 681.

Mortgage rates have remained consistently low throughout the first weeks of 2015. The national average has gone up to 3.77 percent for a 30-year fixed-rate mortgage for people with credit ratings between 740 and 850 with at least 20 percent down, according to Zillow Mortgages. Rates had fallen has low as 3.548 percent in January. Georgia’s rates track the national average at 3.77 percent for a 30-year fixed rate. They had fallen as low as 3.541 percent in January. However, rates are expected to rise at some point this year.

“Rising interest rates can be assumed to have a negative impact on housing both in the price paid and values received,” Walther said. “On a $200,000 loan amount every .125 percent increase in rate equates to a $16 increase in the principle payment. Borrowers will adjust their purchase values based on their ability to absorb the increase in monthly payments.”