How Do Some of These Low-Down-Payment Programs Work?
By Inman | Published: 9/26/2007
In general, cities and counties require that borrowers earn no more than 100 percent to 120 percent of the county's average household income. However, some programs such as the Federal Housing Administration have no income restrictions and do not require the borrower to be a first-time buyer.
Many private low-down loan programs insist borrowers have good credit and also that they obtain private mortgage insurance, which is a small monthly insurance payment that insures the lender against default. Some of the city and county programs are available only in targeted neighborhoods where local leaders are trying to spark reinvestment or increase the homeownership rate.
Resources:
"Unlocking the Doors to Homeownership"
Freddie Mac publication 183
Toll-free: 800-FREDDIE
Website: freddiemac.com
Go to "Home Finance Guide".
