Bush Budget Proposes FHA First-Time Homebuyer Loans...

The Bush administration announced this week that it will propose two new zero-downpayment Federal Housing Administration mortgage loans to help first-time buyers.

The first program will offer first-time buyers with strong credit records a loan to finance 100 percent of a home purchase price, including closing costs.

A second program will help buyers with limited or weak credit histories by initially charging a higher mortgage insurance premium that declines after a period of on-time payments.

The White House also proposed an overhaul to the FHA premium structure from a flat fee charged regardless of the borrower’s risk of default to a tiered pricing structure based on the borrower’s risk. The new plan would reword credit-worthy borrowers and more fairly charge those who represent greater repayment risks.

Source: Reuters News (02/06/06)