Downward Direction for Down Payments
When it comes time to plunk down a 10% or 20% chunk of your home
loan in cash, the down payment can really get you down. In fact,
it scares many first-time home buyers away from pursuing the
Fannie Mae, the federally chartered corporation that purchases loans from
lenders, is trying to lower the financial barriers through a
program called the Community Home Buyer's Program. Four specific
loan programs offer various reduced down payment options that can
get you into a house for as little as 3 percent down, according to Jim DeBoth
in The Journal Newspapers.
Start-Up Mortgage. You pay 5% down for this 30-year, fixed-rate,
graduated payment mortgage, with interest-only payments in the
first year. Although none of your monthly payment goes toward
principal or building equity in the first year, the advantage is
you get to deduct the entire monthly payment from your taxes,
since mortgage interest is deductible. The catch? None of the
5% down payment can come from a grant, family gift or another
loan--it has to be money you saved.
3/2 Option. This option lets you dip into the family treasury a
little. 2 percent of the down payment may come from a grant,
family gift or another loan while only the remaining 3 percent
must come from savings. The term ranges from 15 years to 30
years at a fixed rate of interest.
Fannie 97. Here's a deal--only 3 percent down total. But it has
to come from your personal savings. Fannie 97 is designed for
people with low incomes and a good credit history. Borrowers can
use gifts, grants or loans from family members or various
programs or agencies--such as housing authorities--to help cover
Fannie Neighbors. This program is designed to encourage home
ownership in designated central urban (min. population
250,000), areas with higher minority populations, or
neighborhoods with a median income at or below 80 percent for the
particular metropolitan area.
All programs except Fannie Neighbors are geared toward low-income
families. Check with your local lender because income limits are
set according to the local economy and housing prices.