Democrats Propose $1,000 Down Payment for Homebuyers
Democrats propose a $1,000 down payment policy for homebuyers, echoing past housing mistakes.
2 min read
As the Gateway Pundit recently reported, California is heading down the same path that led to the 2008 financial crisis by allowing people to buy homes they cannot afford. Now, a former advisor to President Joe Biden is suggesting a nationwide policy that would let people purchase a home with just $1,000 down, raising concerns about repeating past financial errors.
Former Biden economic adviser Lael Brainard is proposing a new federal mortgage program that would enable qualifying first-time buyers to purchase a home with just $1,000 down, financed through higher mortgage insurance fees, according to Bloomberg. The Kitchen Table Project estimates the proposal could bring 2.2 million additional renter households into the homebuying market.
The proposed Federal Housing Administration (FHA) program would require ‘strong underwriting criteria,’ including a credit score of at least 660 and monthly debt payments below 50% of income. To cover the cost, the group proposes increasing the FHA’s upfront mortgage insurance premium by about 30 basis points, or 0.3 percentage points.
“Not only can it help move 2.2 million renters into homeownership, it can also be done without any cost to the US government,” said Brainard, who led the National Economic Council under President Joe Biden. Down payment assistance typically involves ‘grants, and grants are a direct cost to the government, and we know that we already have additional fiscal priorities,’ she said. ‘We really looked for proposals that could be done with a minimal amount of taxpayer funding.’
In the private sector, making a loan to someone who is unlikely to be able to pay it back is called “predatory lending.”
This is a horrible idea that would just make housing even more unaffordable and potentially lead to a 2008-type disaster. If this were to arrive on President Trump’s desk, I hope he would veto it. There is so much brain rot about housing in this country. https://t.co/adWaSgnuOH https://t.co/TsFwDJ42qs
Feels as though we tried this once before – can’t recall how that turned out??!! https://t.co/QoTpw1Cnjg
Source: The Gateway Pundit
