Bills introduced to extend ‘zero down’ home loans
Bills introduced to extend ‘zero down’ home loans
WASHINGTON – April 16, 2010 – A pair of U.S. House legislators are rallying support on behalf of the U.S. Department of Agriculture’s (USDA) Single-Family Housing Guaranteed Loan Program, one of only a few remaining residential finance options that do not require a downpayment.
Rep. Shelley Moore Capito (R-W.Va.) and Rep. Paul Kanjorski (D-Pa.) have filed separate bills that would generate new funding for the mortgage program – which is on track to deplete its appropriation for the fiscal year in the approaching weeks – by increasing fees on the loans.
The lawmakers hope to move the measures through committee and to the House floor with due urgency, since the busy spring selling season for real estate is already underway. Standing behind them are industry interests such as the National Association of Realtors® and the National Association of Home Builders.
While some experts see nothing-down financing initiatives as risky, the USDA reported a foreclosure rate of 1.72 percent last fiscal year compared to the FHA’s 3.32 percent.
Supporters laud the USDA program as critical for many low- and middle-income borrowers who purchase modest properties in the exurbs, as well as for first-time homebuyers.
Source: Wall Street Journal (04/14/10)
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