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LAS VEGAS – Federal Housing Commissioner John Weicher, speaking at the National Association of Home Builders’ annual convention on Jan. 19, announced that the Department of Housing and Urban Development is proposing to offer a `zero down payment’ mortgage as part of President George W. Bush’s initiative to remove what is considered to be the major barrier to homeownership in the U.S. – the inability to afford the funds necessary for a down payment on a mortgage. Weicher characterized the announcement as being “the most significant initiative by the Federal Housing Administration in over a decade,” and he indicated the proposal, part of HUD’s Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum 3% down payment for FHA-insured single-family mortgages for first-time homebuyers. Individuals interested in participating in the Zero Down Payment program would have to pay a `modestly higher insurance premium’ which would be phased down over several years, Weicher explained. Families would also be required to complete pre-purchase housing counseling. Preliminary projections indicate the new FHA mortgage product could generate about 150,000 homebuyers in just the first year. “This initiative would not only address a major hurdle to homeownership and allow many renters to afford their own home, it would help these families build wealth and become true stakeholders in their community,” said Weicher. Commenting on the initiative, HUD’s Acting Secretary Alphonso Jackson said,”offering FHA mortgages with no down payment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities.”

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