Bush to Offer Zero-Down FHA Loan

Thousands of potential homebuyers without any money for a downpayment would be eligible for government-insured financing under a proposal that will be offered by President Bush in his fiscal 2005 budget.Hailing the "zero-down mortgage" as "the most significant initiation by the Federal Housing Administration in over a decade," federal housing officials said the plan to eliminate the minimum downpayment requirement will remove the single greatest barrier facing potential first-time homebuyers. "Offering FHA mortgages with no downpayment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities," Alphonso Jackson, acting secretary of the Department of Housing and Urban Development, said in a statement released in Washington. According to HUD's projections, about 150,000 would qualify for the new loan in the first year alone. Normally, the FHA requires a downpayment of 3%-5% of the loan amount. But Federal Housing Commissioner John Weicher said the White House doesn't think those who can afford the monthly payment, but have been unable to save for a downpayment, should be deprived of owning a home. "And under this program, they won't be," he said in announcing the initiative at the National Association of Home Builders' annual convention in Las Vegas.