So I buy a house, turn it into basically a crack house, let it deteriorate into a hot mess, then go fetch my check from the Govt when I want to move up and my resale value is 40% of my loan?

I realize that’s a rare possibility but it happens already today, people let houses go and they need massive repairs/updates to return to comp levels.

Why should we have to pay for that, and/or how would your program exclude that from its coverage?

Utopian idea in theory, not practicable though. Plus Sarah Palin would call you a socialist for even suggesting it.