Zero Down!!! Buy! Buy! Buy!
Amongst the firestorm of the market collapse and lending rules buying houses with zero-down money seemed to be one of the main punching bags for many people. Heck, it was for me. How many Realtors have said this line, "Conventional and FHA loans haven't changed much over the last few years it's the zero-down, no income, high ratio, NINA loans that have caused this problem." And yes, that statement is true, partially, however lets look closer at the "zero-down" part.
Last week at the NAR Leadership Summit I found it very interesting to see a report about loan delinquencies. The report compared conventional, FHA, VA, and sub-prime. Naturally sub-prime was way up, nearly 1/4. FHA had a slight rise, conventional and VA a very slight uptick but were mostly flat.
NAR's chief economist pointed out in the data that it's really interesting to see the VA has not seen a big rise in delinquencies. As most of us professionals know, VA is well known for it's zero-down option for veteran buyers. What was pointed out was that the lack of issues with VA loans shows that zero-down financing simply was not/is not the problem in financing issues.
That made quite the impression on me, zero-down financing is not the issue, obviously it was the incredibly relaxed standards of sub-prime loans. It will be interesting to see if the National Association of Realtors makes some noise with this data, I think they should.