Federal Housing Commissioner John C. Weicher today announced that the Department of Housing and Urban Development is proposing to offer a “zero down payment” mortgage in the hopes it will increase American home ownership.
Speaking at the National Association of Home Builders’ annual convention in Las Vegas, Commissioner Weicher indicated that the proposal, part of HUD’s Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum 3 percent down payment for FHA-insured single-family mortgages for first-time home buyers.
For those that choose to participate in the Zero Down Payment program, HUD would charge a modestly higher insurance premium, which would be phased down over several years, and would also require families to undergo pre-purchase housing counseling.
Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 home buyers in the first year alone, according to a press statement.
HUD is a federal agency that implements housing policy.
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