No-Downpayment Loans Still Out There
Despite banks’ reactions to the foreclosure crisis, it’s still possible for a potential homeowner to buy with no money down.
Some options come from Fannie Mae and Freddie Mac and are aimed at making homeownership possible for buyers with limited credit and savings, including teachers, firefighters, and members of the military. Some of the loan programs, which are available through cooperating lenders, even allow 105 percent financing to cover closing costs.
Freddie Mac says such loans have lower delinquency rates because borrowers are required to complete homeownership education.
Earlier this year, Fannie Mae experimented with a policy that demanded a minimum of 10 percent down in markets where home prices were declining.
In May, it modified the policy to allow buyers in declining markets to borrow up to 97 percent of the purchase price with a conventional mortgage and meet any other need with a second mortgage that lenders are required to forgive after five years of successful payments.
Source: Washington Post, David S. Hilzenrath (06/09/08)
Jana Pounder
Relocation Specialist in Arizona
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A Sen. Dodd is trying to pass a bill that helps people who are upside down in their loans. This is also very interesting.