"Zero Down Payment Plan Proposed" (bush* idea)

[leftchick]

.....ok...as with all bush* proposals, what is the catch?


http://www.suntimes.com/output/business/cst-fin-tick20.html

<snip>

The Bush administration proposed to make it easier for U.S. families to buy their first home with a ''zero down payment'' program. The down payment and closing costs for Federal Housing Administration insured loans would be wrapped into the loan amount and spread over the life of the loan under a proposal made to Congress, said John Weicher, assistant secretary for housing at the Department of Housing and Urban Development. The program will eliminate ''the single biggest obstacle'' to buying a home, which is gathering the down payment and closing costs, Weicher said. Families would still have to meet FHA qualifications and would have to accept home ownership counseling. They also may pay more than in a standard FHA loan, Weicher said in a teleconference from Las Vegas, where he was attending the National Association of Home Builders Convention. The house buyers would pay a premium of 2 1/4 percent of the amount of the loan, and the interest rate they pay would be 75 basis points annually higher than the base rate of the loan for the first five years. The rate would revert to the FHA's standard 50 basis point premium after that, Weicher said.

Note to Mods.... This is an aricle within a News brief. Please let me know if I did not post properly.