Fannie Mae's Newest Scam: Lenders will now be able to qualify borrowers by including income generated by non-borrowers living in the household.

The New York Times reports:

Fannie Mae is overhauling its mortgage program for low- to moderate-income households to better accommodate today’s financial and familial realities.

Lenders will now be able to qualify borrowers by including income generated by non-borrowers living in the household. Data generated by the Census Bureau’s American Community Survey and American Housing Survey shows that this income tends to be stable over time, Mr. Lawless said. (Fannie Mae will publish the specifics on those findings later this year.) “So it’s not only common to have multiple generations or more than one family living in the same house,” he said, “but it’s something that actually helps support the household.”

Borrowers may also be able to include income from non-occupant co-borrowers such as parents. The down payment requirement is as little as 3 percent. Fees and mortgage insurance requirements will also be lower than on standard loans.

No free market in housing lending for you! Just a reminder, housing is overpriced when Fannie Mae has to come up with scams like this to prop up housing prices.