Posted on 09/21/2010 8:20:45 AM PDT by Lorianne
Home buyers can once again purchase a home using FHA financing with a zero down payment.
Previous zero down payment FHA loan programs were funded by seller contributions funneled through a nonprofit group which then donated the down payment to the purchaser. These seller-financed down payment programs were terminated in 2008 after the FHA experienced default rates three times higher than when buyers made a cash down payment.
The innovative zero down payment FHA home purchase program was recently introduced by The Lending Company of Phoenix, Arizona. In order to meet the FHA required 3.5% down payment, the borrower receives a 2.5% gift from a non-profit organization and the remaining 1% can be gifted from a family member.
The Lending Company notes that the program is not a seller-paid down-payment assistance program. To further reduce the amount of cash required by the purchaser, the seller is encouraged to provide seller concessions to cover closing costs. A borrower receiving both gift funds and seller concessions can potentially purchase a home without putting any cash into the transaction.
(Excerpt) Read more at seekingalpha.com ...
This is proof positive that the Obama administration is out to destroy out country.
Wow. Here we go again.
IT MAY BE WELL LIKELY, THAT WHEN APPRAISALS ARE MADE ON THESE HOMES, THEY WILL COME IN UNDER THE PURCHASE PRICE, DUE TO THE GIFTING WHICH HAS TO BE DECUCTED FROM THE SALES PRICE IN AN APPRAISAL. (darn caps lock key....sorry)
I have told many younger people (and I don't feel old for doing it) don't even consider buying a house without a 10% down-payment. Then put 5% down, and the other 5% in a separate account to cover all the costs of home ownership that you didn't anticipate.
As far as I know only two people listened, but they are both still home owners today.
This will become more common.
As discretionary income increase, the downpayments will increase. Simple economics.
Not much discretionary income out there right now.
As long as the monthly payment (principle+interest+proprety taxes and insurance)is about the same as the former rent payments, these people should do ok.
So it’s evil when it’s done under Bush, but okay when it’s done under Obama. Okay. got it.
No matter how you spin it it’s still giving big loans to people who are incapable of saving any money.
The list, ping
Let me know if you would like to be on or off the ping list
Now, we are ‘Back to the Future” with making loans again to persons who do not have the creditworthiness to buy a T-Shirt on a payment plan.
As a person who has paid the down payment or more on the 3 houses I have owned, this is a particularly sore point.
My current property is for sale.
I am not giving any concessions or willing to deal with any ‘creative financing or creative accounting’ in the sale of same.
I do not want to even be a cog in the wheel of such transactions.
Rural property- 5.58 acres- all set up turn-key for horses.
Reinflating the bubble.
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