Most people would be thrilled with a gift of $1,000, as that money could certainly buy some fun. Courtesy of the topsy-turvy housing market, that sum can also buy a home. States including Massachusetts, Wisconsin and Idaho now have programs allowing home buyers to secure a property with a $1,000 down payment while the city of Detroit is offering to sell homes to police and firefighters for as little as $1,000.
Affordable Advantage Program: Homes For $1,000 Down
Low-money down payment offers proliferated in the mortgage industry until the real estate bubble burst. Prior to the mortgage meltdown, those opportunities were linked to the riskiest types of home loan varietals, subprime loans. However, the latest $1,000 down payment opportunities are a new breed of low-money down housing offers launched by the National Council of State Housing Agencies and government-assisted lender Fannie Mae. Massachusetts, Wisconsin and Idaho are all committed to participating in the pilot program dubbed "Affordable Advantage."
Fannie Mae developed the Affordable Advantage program after the Housing Finance Agencies (HFAs) failed at the task of increasing home ownership in their regions. The program has been designed to relieve Uncle Sam of the burden of being the largest property owner in the nation. In 2009, estimates suggested that Fannie Mae owned thousands of properties with a total value of $8.5 billion. The hope is that this program stimulates home buying activity in regions negatively impacted by foreclosure.
The pilot program is being tested out in limited markets and to qualify for the $1,000 home down payment consumers must pass a vetting process proving employment histories and credit scores above 680. While the official pilot program is in Massachusetts, Wisconsin and Idaho, Pennsylvania, California and Colorado has similar state based programs with varying terms. Once home shoppers are approved for the program they will be entitled to traditional 30-year fixed-rate mortgages providing 100 percent financing for the homes' full purchase price. Program participants will also benefit from lower than average fees (reducing closing costs) and will not be required to buy mortgage insurance.
Firemen and Police, Offered Homes for $1,000
Detroit, Michigan has been feeling the brunt of the nation's economic woes courtesy of the double punch from both the carnage caused by the mortgage and car industry. Blocks once teaming with life are now virtual ghost towns as the local population is shrinking in reaction to the city's ridiculous high unemployment rate of nearly 45 percent (Detroit News, 2009). Detroit Mayor, Dave Bing, is now offering local safety workers the ability to buy city properties at $1,000 in order to pump new life into the region.
Bing's approach is for killing several birds with one stone. Twelve years ago, Michigan legislature abolished a law that mandated Detroit cops needed to live within city limits. Since that time, nearly 53 percent of the city's police force and even a larger percentage of firefighters have moved outside of the city. The new $1,000 home purchasing plan dubbed Project 14, is a way to entice city workers to move back to town on their own, as well as fill some of the vacant homes lining city streets. Advocates for the plan are quick to point out that program does not require any tax payer money but instead is coming from the U.S. Department of Housing and Urban Development (HUD), neighborhood stabilization funding and partnerships made with local banks and credit unions.
Bargain Homes Present Throughout Nation
While not all regions have $1,000 homes for sale, there are bargains to be had almost everywhere. In 72 percent of all American cities, buying is cheaper than renting a property. The Wall Street Journal reported that home prices have officially dropped to pre-bubble levels and throughout the nation, 25 percent of private sellers have discounted their listing prices in order to compete with the slew of real estate owned properties flooding the market place.
Regardless of the a home buyers vision of the American Dream, the time has never been better to buy a home now. Individuals interested in taking the leap of faith can count on Mortgage Marvel, the industry's premiere mortgage rate origination tool, to make comparison shopping for the best rates a breeze. Visitors to Mortgage Marvel simply need to enter the zip code for where a mortgage is needed and Mortgage Marvel will quickly generate a mortgage rates comparison table featuring opportunities from a large assortment of local lenders. That way consumers who many to score the best deal on a home purchase, can get sweet satisfaction along with securing the lowest mortgage rates possible.
