Department to Propose "Zero Down Payment" Mortgages

Tuesday, January 20, 2004

Federal Housing Commissioner John Weicher announced yesterday that the Department is proposing to offer "zero down payment" mortgages, the most significant initiative by the Federal Housing Administration in more than a decade. FHA initiated the action to help remove the greatest barrier facing first-time homebuyers: a lack of funds for a down payment on a mortgage.

The Commissioner said the proposal, once approved by Congress, will eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.

It is estimated the voluntary Zero Down program will enable some 150,000 families to become homeowners in the first year alone.

The Department proposes to charge a modestly higher insurance premium on the loan, which would be phased down over several years. The Department also proposes to require families to undergo pre-purchase housing counseling.

Content Archived: September 09, 2009