First Time Homebuyer Relief From the Whitehouse

A Federal Housing Administration mortgage program, described in Bush’s latest budget proposal, would offer a zero-down-payment program that would allow first time buyers with good credit to finance 100% of a home’s value, including closing costs. This would benefit those that are financially responsible, but may have just entered the work force or those that have struggled to save a down payment while meeting their other financial obligations.

A second program would allow borrowers with limited or weak credit to get a loan under the FHA program that would charge a higher insurance premium that declines as the mortgage progresses. The proposal also mentions an FHA overhaul to the premium structure, a move that would dissolve the flat fee normally charged to borrowers to a tiered pricing structure based on the risk of the loan. This would enable those individuals that maintain a good credit rating to pay less than those that may have been financially irresponsible in the past.