100% Financing is on its deathbed. I predicted this in a past blog a few months ago (click here), and I hate to say it, but we are returning to the world of a minimum of 3 - 5% down. Speaking with my go-to loan officer the other day, it appears that the zero-down programs of yesterday are all making the migration to 5% down starting on January 15th, which is the end of next week. That's right - if you have not closed escrow on your loan by then, your zero-down program will sunset (no longer be available).
If you meet certain qualifications, you may now be able to qualify for an FHA loan, with a 3% downpayment...There was a Senate Bill earlier this year that was attempting to change the FHA required 3% down to 1.5% down, but I do not believe that went anywhere.
Marlena found one program that offers an 80-20 scenario with pretty decent rates and terms that will not be going away abruptly January 15th, but who knows just how long that program will be available...
If you want to purchase a home with zero down, you'd better act fast - or start saving your pennies. If you want to talk to Marlena Olson with the Vitek Mortgage Group, she can be reached at 916-486-6900.
http://www.erinattardi.com/financing.htm
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A Realtor with Lyon Real Estate, she works with buyers & sellers in Arden, Carmichael, Land Park, East Sac, & the Greater Sac areas. Co-host of the Nick & Erin Radio Show on the Voice of Sacramento.
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We knew it could not last and yes 75% of our business was just as you describe.
Erin, there will certainly be way fewer opportunities to get 100% LTV. Unfortunately, this is going to send housing prices lower yet, especially in the lower price ranges - because that's where many folks had been buying homes with nothing down.
Erin, IMO zero down got us where we are today. If a buyer doesn't have any skin in the game when things get a little rough they are gone.
Funny you say that, Erin, because my loan officer is still getting 100% loans in Sacramento; albeit there are not as many options as a year ago. The Nehemiah program, for example, has been extended for a year. The problem some agents are seeing is when the appraiser checks the "declining market" box, a 100% loan will be denied. So, for some neighborhoods, 100% financing is not an option. But some areas near the Capitol are still appreciating, thank goodness.
Hi Elizabeth,
About an hour after I posted this, Marlena called to tell me that CalHFA is not adopting the same 5% piece that others are, which is awesome! Only glitch in that is that underwriting for CalHFA is taking 3+ weeks right now...oh well. Also, it seems that there are few lenders willing to take on a purchase money 2nd, so buyers are left to pay PMI...My last three buyer transactions were all 100% deals that were in areas of "declining value" and closed without any hitches...there are still a handful of options, just not nearly as many. I will be curious to see how things shake down after January 15.
Erin
Yup, they are still out there. Nobody is throwing in the towel on first-time home buyer programs at 100% financing yet. But the buyers better have good credit!
I'm dealing with this right now, had a property that was being partitioned and it didn't record until the 17th and the buyers of the home were doing a 100% financing program and now we are scrambling to close and find the 3% down.