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.