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Lending standards have loosened up in the past few months, according to the Chicago Tribune, which is good news for the country's home builders. Buyers with moderate incomes and not a lot of down payment may have an easier time buying houses.

Terms of these loans include down payments as low as 1%, debt-to-income ratios as high as 50%, and looser definitions of what qualifies as income.

It's all part of a nascent effort by major lenders and mortgage investment giants Fannie Mae and Freddie Mac to reach out to creditworthy borrowers — millennials, immigrant families and first-time buyers of all backgrounds.

The key term here is creditworthy. The new low-down-payment loans are not for people with subprime credit histories or FICO scores in the tank. Unlike mortgages during the bubble years of 2004 through 2007, they come with mandatory full documentation underwriting, buyer education counseling programs and the sort of hands-on servicing that was painfully absent a decade ago.

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