The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: bentway who wrote (51577)	4/7/2006 12:29:05 PM
From: GraceZ	Read Replies (2) of 306849

Mortgages vary significantly from state to state. What years were you able to do zero downs using a conforming mortgage? When I bought my first house in 1987 the only option for a zero down owner occupied house was FHA. Frannie or Freddie wouldn't pick up a zero down without FHA insurance no matter how good your credit was. They would do a 5% down though with mortgage insurance. Same thing in 1991 when we bought the second rental property. Our only options were put 20% down for conforming or find a lender who would hold the mortgage in their portfolio. Owner occupied around here didn't pay a premium but they had to have at least 20% down to not have to pay above market points and be forced to buy PMI. Underwriting was significantly tighter than it was in 1989, the year RE peaked in the area and it stayed that way up until the late 1990s. Now anyone can get a zero down conventional by taking out a subordinated second on purchase but the GSEs will still not buy a loan with 100% financing without a big discount. The borrower pays for that discount somewhere. Mostly the added cost is spread out among all borrowers.

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