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Zero Downpayment Bill Introduced in the Senate

S. 2753 is the Senate counterpart to H.R. 3755, a bipartisan measure introduced earlier this year by Reps. Patrick Tiberi (R-OH) and David Scott (D-GA) to authorize the secretary of the Department of Housing and Urban Development to insure zero downpayment mortgages for single-family detached homes, condos, co-ops, manufactured housing and four-unit buildings.

Currently, the FHA requires a 3% minimum downpayment under its single-family program.

A top legislative priority of NAHB, the measure addresses one of the biggest obstacles facing families aspiring to become home owners — the ability to assemble enough funds for a downpayment.

The Zero Downpayment Act of 2004 would allow families who seek FHA-insured loans to include the downpayment in their loan amount. These borrowers would still have to meet FHA credit qualifications and would pay a slightly higher annual interest rate to cover the cost of the program. Borrowers would also be required to receive counseling to ensure they are ready for the financial responsibilities associated with homeownership.

“This legislation provides a wonderful opportunity for those Americans who are on the edge of homeownership to begin building better lives and neighborhoods all over the country,” said Smith.

To read the legislation, click here, and enter the bill number in the box at the upper left.

For more information, e-mail Greg Brown or call him at 800-368-5242 x8421.

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