The president's budget calls on Congress to approve two new Federal Housing Administration loan programs -- one for creditworthy homebuyers and another for borrowers with "weak credit histories.""The Zero Downpayment mortgage allows first-time homebuyers with a strong credit record to finance 100% of the downpayment and closing costs," the fiscal year 2005 budget says. FHA Commissioner John Weicher previously announced that the president's budget would include a zero-down mortgage. The second program appears to be modification of a Bush administration proposal to create an FHA subprime program for borrowers with "poor credit ratings," which Congress rejected last year. "For borrowers with limited or weak credit histories, Payment Rewards initially charges a higher insurance premium, but reduces the borrower's premium once they have established a history of regular payments, thereby demonstrating credit worthiness," the president's budget says. The Bush administration is also proposing to eliminate FHA insurance refunds, except in refinancings.

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