Fannie and Freddie are down for the count.  The government is set for another bailout....Now, the housing market has slowed and the mortgage industry has been punished for its transgressions, obtaining mortgages for all but the best conventional, conforming, borrowers is difficult to impossible to accomplish anymore. Even the venerable Fannie and Freddie have whacked product. 100% LTV loans and severely limited the low down payment loans, the cornerstone of the so-called emerging markets loans, have been virtually eliminated.  

Where is the mortgage industry headed....down the FHA route of course.   FHA has a G.A.P. program that's been around since the 1930's in which borrowers can borrow 100% of the home purchase price.  This program interfaces with FHA. 

FHA, itself is a 97% LTV program that has so many variables.  Some of the advantages are:

1)  Downpayment can be zero or, if 3% down, then can get a gift;

2)  Borrowers can co-sign even if they won't live in the house.  THIS IS A HUGE difference between the primary agencies.

3)  Lack of credit or less than great credit is perfect here for FHA;

4)  Appraisal restrictions have been diminished from the restrictive days gone past;

5)  Most real bankers and lenders want to purchase FHA loans;

6)  Loan limits have been raised so much in the last year

There are a myriad of other reasons to use FHA, but with the markets the way they are, realtors and clients need to know that this is a HUGE and VIABLE alternative.