<p>[5%</a> Downpayments Are Back As Mortgage Companies Swing For Fences Again](<a href=“http://www.businessinsider.com/henry-blodget-5-downpayments-are-back-as-free-money-makes-mortgage-companies-go-insane-again-2009-12]5%”>5% Downpayments Are Back As Mortgage Companies Swing for Fences Again)</p>
<p>5% ? where you been? FHA has been doing 3.5% loans and remember, they are “the only game in town.” I routinely see sales reported in this area (Charlotte) at prices that are higher than the listing price. Strong market? Bidding wars? Not by a long shot. Just a little monkeying around so that buyers are paying nothing down! </p>
<p>Example: Seller asking $100,000. Ends up selling house for $105000. FHA loan is 96.5% of sales price, or $101,325, so seller gets his money, buyer effectively puts zero down, and there is even a little extra to spread around and everyone is happy!!! YAY!!!</p>
<p>FHA loans are not standard conventional loans. These are.</p>
<p>[Comparison</a> of FHA loans vs Conventional loans](<a href=“http://www.fhainfo.com/fhavsconventional.htm]Comparison”>http://www.fhainfo.com/fhavsconventional.htm)</p>
<p>The real estate market came alive in our neighborhood in the last five months. We had several sales at about 24% below peak in August. We had another sale in the last two weeks around 11% off the peak. I couldn’t believe it. Maybe there were kickbacks or allowances in that number but that was the number in the paper.</p>
<p>An older couple bought the foreclosure next door for the same price that the others did (about 24% off). They’ve spent about two months (weekends and a few evenings) trying to clean the place up. The husband is apparently a contractor and has done a lot of work in the place. The wife said that they would never buy a foreclosure again. It appears that they might have overpaid for the place unless there are some big allowances that aren’t reflected in the public sales price.</p>