Alternative mortgage loan programs requiring little-to-no down payment, including zero-down, piggyback loans, and grants are becoming popular again, says one real estate agent.
“These programs are wonderful for those who can’t afford to buy,” says Michael Chelst, branch manager for Norcom Mortgage. “More people can buy homes now ... It’s a double-edged sword. These loan programs are more expensive.” Chelst added that prices rise when there are more buyers on the market, and higher prices help sellers, The Washington Post reports.
Other than Veterans Affairs and U.S. Department of Agriculture zero-down loans, 100 percent financing loan products completely disappeared after the market crash. Underwriting requirements got stricter, and it became almost impossible for cash-poor buyers to purchase a home. Buyers with foreclosures or short sales on their credit reports were cut off completely.
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