Feb 16, 2008
100% Financing — Going, Going, Almost Gone!?
16 Feb 2008
Posted by Scott Rogers
A few months ago, most lenders in our area stopped offering “80/20” loans — and last week, VHDA suspended their 100% loan programs!
I have always sent first-time buyers to lenders that offer VHDA financing programs. These programs offer below-market rates for first time home buyers, with flexible financing up to 103%. However — as of April 1, 2008, these 100% loan programs will be suspended (i.e. not available) until further notice.
The explanation, in an e-mail from Michele Watson (Director of Homeownership Programs, VHDA) was that it is “…an effort to best utilize our resources, maintain adequate long term funding for our loan programs and to mitigate the risk to our borrowers and VHDA…”
There are still some 100% options, but as the number of programs dwindle, it will become increasingly harder to finance a home purchase, especially for first-time buyers. Some remaining options include:
* VHDA/FHA 103% loan program (via any VHDA lender)
* Fannie Mae 100% program (via most lenders)
So . . . if a Virginia buyer needs a 100% loan, and isn’t committing to it on or before March 31, 2008 — prepare for fewer options, with less favorable rates.