For some reason whenever I think of down payments, the cult classic The Wedding Singer comes to mind. It’s the scene were lovable-but-heartbroken-hearted wedding singer Robbie Hart is trying to get a job at the bank in a sweetly misguided attempt to win the heart of lovable-but-engaged Julia. Our hero tells the bank manager, “…I’m a big fan of money. I like it, I use it, I have a little. I keep it in a jar on top of my refrigerator. I’d like to put more in that jar.”

With the current issues regarding FHA down payments – be it loophole gifts or the proposed legislature to change the minimum down payment from 3% of the cost of a home to 0% – I’ve been thinking a lot about the importance of the money in the jar (or wherever it may be. I see a bank as more practical). I think it’s terrific that the FHA is looking at giving people who don’t have the cash for a down payment the opportunity to buy a home. On the other hand, I just don’t want people to neglect their jars on the refrigerator. Just because there is a minimum, doesn’t mean you have to settle for it.

HUD and the FHA are presenting themselves with an opportunity and a challenge. There is the chance to make the FHA loan the subprime darling of yesteryear and an invitation to educate. Stressing the importance of putting down a payment (when possible) and the other subtleties related to lending that many first time homebuyers aren’t aware of will be the key to breathing life back into the FHA.

This entry was posted on Tuesday, May 22nd, 2007 at 6:44 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.