Hmm, so my taxes are subsidizing the loans for him to stay in a house I can’t buy because he’s staying in it subsidized by my taxes. 🙂 Nothing to hate there.

Seriously, for your friend, it’s a good deal. For Joe Schmoe, maybe, maybe not. How many are going to increase their incomes by 6% a year? Honestly, if I could get the deal, I would.

And again, not necessarily your friend, but for Joe Average borrower that didn’t understand their option ARMs, do you think they understand this deal or do they just understand they get to stay as long as they make payments?

By real problem is more simple, it’s the DTI target. 31%. Studies have repeatedly show that in excess of 30% of income going to rent is a driver of poverty. This is very close to renting and for many, I suspect it will be a gateway to poverty.