The Federal Housing Administration -- a vehicle for government-backed mortgages where taxpayers bear all the risk -- gives out loans that require borrowers to post a meager 3% down payment. If a “would-be” home owner cannot scrape together this amount of cash, that person should rent and save their cash.
In an effort to boost home buying a number of states are finding creative ways to advance the Federal tax credit to buyers on the day they get their new keys, rather than having to wait for next year's refund check. States are employing schemes whereby they offer prospective buyers low or no-interest loans for the amount of the tax credit, due upon of receipt of their money from Uncle Sam. In Washington, the state Housing Finance Commission also runs a tax credit bridge-loan program, which it hopes will grow in the coming months.
If this sounds eerily similar to the type of lending practices that got us into this mess, well, it should.
