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how low-down programs work |
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How do some of these low-down programs work?
Most of the private and government low-down loan programs have special requirements. These rules range from requiring borrowers to be first-time home buyers to limits on family income.
In general, cities and counties require that borrowers earn no more than 100 percent to 120 percent of the county's average household income. However, some programs such as the Federal Housing Administration have no income restrictions and do not require the borrower to be a first-time buyer.
Many private low-down loan programs insist borrowers have good credit
and also that they obtain private mortgage insurance, which is a small
monthly insurance payment that insures the lender against default. Some
of the city and county programs are available only in targeted
neighborhoods where local leaders are trying to spark reinvestment or
increase the homeownership rate.
Resources:
* "Unlocking the Doors to Homeownership," Freddie Mac publication 183; call (800) FREDDIE.
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Last Updated ( Tuesday, 29 July 2008 )
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