Bill Introduced in Congress for Zero Down Payment Mortgages |
| RISMEDIA, Feb. 5-Legislation that would eliminate down payment
requirements for first-time homebuyers seeking federally insured
mortgages has been introduced into Congress by Rep. Pat Tiberi (R-OH).
The proposal was released to the public by the Department of Housing and
Urban Development last month, and needs Congressional approval before
any zero downpayment mortgages are released. "This legislation will make the dream of home ownership come true for families who can make monthly payments, but have been denied a mortgage simply because they don’t have money for down payments," said Tiberi, a member of the House Housing Subcommittee. "Minority families in particular are burdened by high down payment requirements.” "This new zero down payment program will be available to first-time homebuyers seeking loans insured by the Federal Housing Administration. It will make home ownership possible for those who meet FHA’s underwriting requirements and who could easily afford a monthly payment, but because of their circumstances have simply not had the opportunity to save for a down payment," he added. FHA loans typically require a minimum down payment of 3 percent. Tiberi’s bill would implement a proposal made by the Bush Administration and allow FHA to back loans with no down payment required. "The legislation introduced by Congressman Tiberi to offer FHA mortgages with no down payment will unlock the door to homeownership for thousands of American families, particularly minorities," said HUD Assistant Secretary for Housing and Federal Housing Commissioner John C. Weicher. "President Bush has pledged to create 5.5 million new minority homeowners this decade, and this legislation will help meet this goal." This new zero down payment option along with FHA’s existing standards will mean that, in the first year alone, an estimated 150,000 new families will be able to own their own home. "Families who qualify for zero down payment mortgages will be charged a modestly higher insurance premium on their home loan," Tiberi explained. "For example, on a $100,000 mortgage, a zero down payment borrower will pay approximately $50 a month more than a regular FHA borrower. The higher premium will completely cover the costs of the program, meaning there is no additional cost to the taxpayer." Tiberi, a former Realtor, was joined by Financial Services Committee Chairman Mike Oxley (R-OH), Housing Subcommittee Chairman Bob Ney (R-OH) and other House members in introducing the zero down payment legislation. The Mortgage Bankers Association (MBA) also applauded Tiberi for introducing the legislation. “A lot of consumers have the income to make mortgage payments and have a good credit record, but can’t overcome the hurdle of a down payment,” said Kurt Pfotenhauer, MBA senior vice president of Government Affairs. “This legislation will give future homeowners a chance to own a home today. MBA appreciates Rep. Tiberi’s leadership on this issue and fully supports his legislation. We encourage Congress to pass this legislation.” RISMEDIA welcomes your questions and comments. Send your e-mail to: editorial@rismedia.com |