100% Financing for buyers...is it a loan of the past?

Real Estate Agent with Coldwell Banker West Shell

I have been in touch with several mortgage officers since licensed 6 years ago. It seemed every officer had a different story. Yes, there is 100% financing for buyers. No, there is no 100% financing.

Well it came down to this week...No, there is no more 100% financing. They are saying that is a loan of the past and it will be awhile before we see it again. The USDA Rural Development Loan was the best product I have seen in a long time. 100% financing with no money down and no PMI. It was a great deal for my buyers. Especially in the market I work in. I live in a small town that has tons of new development and a great school district everyone is fighting to get into. So losing this loan was a great disappointment to me and my first time home buyers.

Today buyers/clients are having a hard time saving. Well who isn't? Saving for the down payment for their dream home is now a thing in the past also. However, I heard some great news today. There might be a stream line loan coming and the Feds are deciding on it on Thursday of this week.

I am not sure how everyone feels about this; but 3.5% down to some buyers/clients can be someones life savings right now. Being that the FHA loans are now less than a 5% interest rate even though they are asking for 3.5% down the credit score requirements are only 580. Being that the credit scores used to be at 620 it is great to see them drop.

For our buyers/clients it is a great time to buy. I have even seen sellers buy points down on loans for my buyers. I can not stress enough to everyone....."For every dirty little house, there is a dirty little couple." (I am not saying your home is dirty nor you, its just a figure of speach) The time is now to buy and sell. Get ahead of the game in 2009.

Make it a great year.

Comments (6)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Your post assumes that the folks in Congress, at HUD or Fannie/Freddie actually CARE.

They do NOT.

Feb 03, 2009 06:02 AM
Julie Ferenzi
john greene Realtor - Plainfield, IL
Julie Ferenzi

Unfortunately buyers do not have the mindset of needing a down payment... and they have entered the market unprepared. 

I think that not needing a down payment is what got us into this mess, and as much as I'd like to see myself selling houses again, I'd rather see the economy improve and secure a promising future for my kids, than head down the same path that has caused this mess in the first place. 

Feb 03, 2009 06:06 AM
Home Loan Search.Online
Home Loan Search Online - Newnan, GA

I'd be interested to see what happens to the bill recently reintroduced bringing back seller paid downpayment assistance. I'm sure it's on hold until they can figure how to spend the stimulus plan.

Feb 03, 2009 06:08 AM
Joseph Banske
Cherry Creek Mortgage - Waukesha, WI

Well I am sure that 100% financing wont be back soon. There are efforts to bring back the controversial Down Payment Assistance. It seems like there is a third bill trying to make its way as stimulous... well if we can have funding for STD's why not DPA's..hehehe

FHA lending is an area I have focused on for the past 11 years. I hvae never seen a 700 requirement or benchmark. The floor used to be at 500 but in practical terms a 550 -580 range needs to be in place because of the actual real life credit that you are dealing with.

If you ever need help on a FHA loan look me up... I am REALLY strong at putting the good people ..tough issues together to equal a good loan.


Happy Tuesday!


Feb 03, 2009 06:09 AM
Associate Broker Falmouth MA Cape Cod Heath Coker
https://teamcoker.robertpaul.com - Falmouth, MA
Heath Coker Berkshire Hathaway HS Robert Paul Prop

I had a buyer ask for 100% seller financing with a 2% interest rate on a 75% offer.  LOL.  I asked would you do that deal as a seller?

Feb 03, 2009 06:13 AM
Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

Hi Jaime,

The rules and requirements change so frequently nowadays - makes my head spin.

No question about it - at today's prices - and in my market (Cambridge, Mass) a starter one-bedroom condo is north of $250,000 - 10% down payments are big money.  Plenty of responsible buyers were able to put down 5% or even less and become homeowners. And long before I got into real estate - almost before I was born! - my parents put only a few hundred dollars down on their first house - I think it would have worked out to 5% or less - unless the details of the family legend have gotten skewed over the years.

I for one hope that there will continue to be loans for those without huge savings.


Feb 03, 2009 06:53 AM