[quote=paramount]Yah, let’s prevent the same people who had to pay for bank bailouts from owning a house.

The rules stated in the article are far to stringent.

The following basic guidelines make sense (although each situation should be treated uniquely):

Credit Score: 650 and above
Down Payment: Anything below 20% pays PMI
Income Ratio: 36% Gross Income to Loan Amount[/quote]

Down payments below 20% make one a glorified renter, not an owner. If a would-be owner can really afford a house on the typical 30-year mortgage, then a 20% down payment should only take 6 years to save up for.

That means that if you start saving at about the time you plan to have kids, you can rent for 6 years while saving up for a home, and then actually buy and move into that home when the kid starts school. 20% down payments are perfectly reasonable.

All these government subsidies and lowering of down payments is just causing house prices to go up. Requiring at least 20% down payments from everyone means you won’t be competing against speculators who ‘buy’ with 0% down and then dump their houses a couple of years later if they don’t go up in value.