No Money-down Mortgage Programs Appealing To Consumers

Record-low mortgage and inflation rates have encouraged more Americans to consider purchasing a home. But many individuals struggling to pay down debt or maintain their financial obligations find it difficult to come up with the money for a down payment. As a result, many state programs have been established to help individuals purchase a home.

Some programs, such as MassHousing, require little- to no-money down, making homeownership more affordable for families who have been affected by the recession. MassHousing, for example, requires consumers to put down as little as $1,000 to secure home financing, according to the Boston Globe.

However, such programs have recently come under fire by mortgage professionals and government officials. Many believe that removing the down payment requirement poses an additional risk to the economy by assigning mortgage loans to risky borrowers.

"I think a zero down payment is a mistake," U.S. Representative Barney Frank told the Globe. "Homeownership is a good thing, but we make a mistake when we push the envelope too far. You don’t do people a favor."

Many opponents are urging state officials to cancel the programs in order to quell further foreclosures. Although a number of debt relief programs exists, foreclosures continue to increase and are expected to exceed three million by the end of the year.