Bush proposes 'zero down payment' HUD program

The Tribune-Review ^ | February 1, 2004 | Ron DaParma

[yonif]

Potential good news for prospective home buyers is a proposal by the Bush Administration to include a "zero down payment" mortgage as part of the U.S. Department of Housing and Urban Development's 2005 fiscal year budget. The proposal could generate about 150,000 additional home buyers in the first year alone, according to HUD officials. The proposal would allow qualified home buyers to avoid the current 3 percent down payment requirement for a Federal Housing Administration loan. Such FHA-backed loans can be as high as $173,423 on a single-family house in the seven-county Pittsburgh region.

[GeronL]

I would hope not. won't buy him any votes, probably lose some if it were for minorities only

[exit82]

/No,this is only for those who come here under the amnesty proposal/s.

This may create more homeowners,but for how long until they can't afford the payments, and the taxpayers are stuck with yet another foreclosure?

Why is gov't involved in this at all? If this is such a good idea,private enterprise can take these risks.

[Kirkwood]

I know people who could benefit from this. They are stable, young, hard-working people who have enough income to make monthly payments, but have a hard time saving up for a down payment.

[JSteff]

A related tangent concerning FHA foreclosures. There will be a 2 day auction on difficult to move FHA properties (current foreclosures) at the end of this month.

Might be a way to get in on some bargain properties for all you aspiring investors. Watch for the news in the next few weeks.

[Keyes2000mt]

The closing costs are what will kill me. BTW, Private Banks do already offer No Money Down loans.

[Hodapp]

Gee. No money down.

I am in the apartment business. My wife and I borrowed against everything we had to buy a 56 unit complex in Anderson, Indiana. We had to come up with almost 30% to get our loan. Since we took over, six factories here have closed and jobs sent overseas or to old Mehico. The Feds take 30% of my income, and the County raised my property taxes from $44,000 to $66,000 - effectively taxing me out of business. Government takes my tax money, but gives eleven year tax abatements to a developer who is building two apartment complexes to compete with me. The county and HUD take my tax money and gives $484 a month to my competition for every welfare family they let in. The state takes my tax money to form a lending department to make it simpler for non-working people with terrible credit to buy their first house instead of renting from me. Meanwhile, the Fed keeps interest rates artificially low so more cheap, worthless homes can get built for these people who have no business going into that much debt. In our state, both bankruptcies and home foreclosures are higher than anywhere in the country, because of this madness of income redistribution that city, state and federal government engages in. There's no shame anymore, no repercussions for going broke and stiffing your creditors, because there will always be a government safety net to let deadbeats turn right around and do the same thing all over again.

Government taxation is forcing me to sell my business in just two years, and with these current conditions, I'll be lucky to find a buyer. I have tried for two years to stay off of the government teat, to not apply for programs and handouts, to do things the right way and make it on my own. But the explosion of government programs and entitlements and vouchers and tax abatements and every other kind of scheme designed to let an ever-expanding class of mooch gulp down my tax money has finally killed me.

So now Bush's HUD is going to get a bigger budget to give away essentially free mortgages to these deadbeats. Explain to me again why I should vote for this guy. Gee, maybe he can come up with a federal program to pay me to vote for him. Republican, indeed.

[yonif]

bump

[txzman]

Maybe they should talk to Mitsubishi who developed an 'almost no downpayment, no credit problem' approach to selling their hip new Eclipse to the young and new car buyers. The result?

Loss of over $400 million in bad car loans and another $430+ million in incentives/losses to unload inventory.

[thefactor]

i'm no businessman, but if what you are saying is true, than applying for gov't "handouts" as you call them wouldn't be living of the gov't teat. it would be you getting some of your money back that they have taken. i would call it playing by their rules.

[HitmanLV]

Anybody think Dubya couldn't sleep one night and caught Carlton Sheets's informercial? ;-)

[FITZ]

Keep your apartments, a lot of these people will be back after they don't make a few payments and get foreclosed on those houses. Lucky for them, they won't need to worry about losing a large down-payment. Walking away from the mortgage should be much easier.

[FITZ]

This should help the rate of foreclosures increase. Basically the government is helping them have a house instead of renting ---- but they won't have anymore into the house than they would have put into a rental --- and foreclosure won't be seen as a loss ---- many people desperately avoid foreclosure just because that down payment they made keeps them hanging on.

[spodefly]

BUMP!

[rebel]

Oh....The "got to have it now" generation looks to government to do what they should do themselves.

Bush is more than willing to help. Its "compassionate".

It is easy to be compassionate with anothers money.

Another Bush vote buying scheme. He has learned well from Ted Kennedy.

[Broadside Joe]

Not quite the free ride as it appears.

(1) Although they don't have a down payment they still have closing costs. Appraisal, Title insurance, Homeowners insurance, closing fees, title fees, recording fees, prorated property taxes and tax/insurance escrows.

(2) This is better than the the "$200 million American Dream Down payment Act -- that provides a maximum down payment assistance GRANT of either $10,000 or 6 percent of the purchase price of the home, whichever is greater, to qualified home buyers" because the buyer pays a mortgage plus insurance premium and instead of a $100,000 mortgage minus the $10,000 or 6% GIFT, they repay on $100,000 (That's interest AND the mortgage insurance premium @2.25%)

(3) As to HUD auctions, from what I've seen (in my area) the buyer does not get a very good "deal" for a number of reasons.

And for all of you rental owners, you have my sympathy because you are BIG BAD BUSINESS PEOPLE and the deck is stacked against you.

[verity]

Your ox was gored!

[Broadside Joe]

Oh and I forgot to mention that at one time at least, the MIP (mortgage insurance premium) which insures about the top 20% of the loan amount, actually turned a profit.

Yes you heard it here folks, a government program that was actually self sustaining. (don't know if it still is though)

[rabidralph]

As a vet, I would not have been able to afford my home without the VA loan, which stipulates no downpayment necessary. I hope this program, if implemented, would scrutinize the income of the prospective buyers before letting them buy a house they will eventually lose.