No doubt it is true. To buy a home YOU need the money to place the downpayment...if not you have no business buying.

Not sure about having no business buying,  maybe the banks should be more careful about who they are loaning the money to.

If the seller want to sell and the buyer want to buy, the main reasons for the "seller assistance" is to get the seller's price and for the buyer to get the loan.  But if the seller would sell at a price that is reasonable and if the buyer would buy in a price range they can afford, isn't the market as a whole, stronger?

I see this two ways:

First of all from the prospective of the Senate and Lenders... true, buyers with no money into the house are 3 times more likely to default, I agree.  That statistic doesn't lie, it is what it is.  But you also have to look at the number of people who used down payment assistance in conjunction with a 3 year ARM or Interest only mortgage that defaulted after the rate adjusted.  I think the numbers would be slightly skewed. 

But, I also see down payment assistance programs as a way to help good people who are credit worthy get into a house.  For example, say a single mother with good credit who pays $1200 a month in rent wishes to buy a property that if she bought it would only have a $1100 a month 30 year fixed rate mortgage (including escrow for taxes and insurance).  BUT, she is not able to come up with 10% to put down because she is on a tight budget with kids to take care of, education expenses, rent, etc.  Why should she be denied the right to own a home even though she is credit worthy and could easily pay the mortgage every month?

I think they need to take a better look at the programs as a whole and determine better guidelines as well as restrictions as to how these assistance programs could be applied, to whom, and under what situations these programs can be used instead of just eliminating them.  These programs actually do some good for some people, just because others have abused or misused them doesn't mean everyone should be penalized for it.

Are we really suprised?

Jim

Hello Jeff,

How does ths affect the 'Rent to Own' option?