Thursday, October 2, 2008

Zero-Down Loophole for Home Buyers Ends Today

Lansing State Journal (MI) (10/01/08); Guest, Greta
Seller-funded down-payment assistance is no longer allowed for FHA-guaranteed mortgages, and the nonprofits offering such help believe home buyers unable to secure nothing-down financing will be turned away at a time when they are crucial to the housing market's recovery. However, HUD insists that zero-down mortgages guaranteed by the FHA have default rates three times higher than FHA loans with down payments. Additionally, low- and moderate-income buyers still have access to down-payment aid through state agencies and traditional charities, both of which generally impose income guidelines and counseling requirements.

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