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FHA Zero Downpayment Bill Introduced in House
Bipartisan legislation introduced last week by Reps. Patrick Tiberi (R-Ohio) and David Scott (D-Ga.) that would allow the Department of Housing and Urban Development to begin offering a zero downpayment mortgage has received the enthusiastic support of the nation’s home builders.
NAHB President Dave Wilson said that the legislation, the “Zero Downpayment Act of 2005,” H.R. 3043, “would address one of the biggest obstacles facing families aspiring to become home owners — the ability to assemble enough funds for a downpayment,” said NAHB President David Wilson. “The legislation would help working families, particularly minority households, to achieve the American dream of owning their own home.”
In order to receive broad congressional support, the legislation was crafted as a “pilot program” at little or no cost to the federal Treasury. It would enable up to 50,000 families to take advantage of this new opportunity to buy a home without a downpayment.
The bill would waive the statutory requirement for a minimum 3% downpayment for FHA-insured, single-family mortgages for first-time home buyers and would allow families to include the downpayment in their loan amount.
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 complete a homeownership counseling program.
“H.R. 3043 will help close the housing affordability gap and we urge Congress to act swiftly on this bill,” said Wilson.
To read the legislation, click here and enter H.R. 3043 in the box at the upper left.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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