I agree with TheBreeze that the so-called “tight” credit for home buyers today is laughably loose. I don’t care what your credit score is, lending more than 80% of the cost of a home is ridiculously risky in an overpriced and declining market like the one we have in many places today.
If you think house prices might drop as much as another 30%, then that should be the minimum down payment for a loan with a single digit interest rate. Government agencies enabling anything more aggressive than this are throwing away taxpayers’ money. Only in incredibly stable markets, over periods of 20-30 years, would a downpayment of 10% make any sense, and then only for enforceable recourse loans to people with excellent credit records buying inexpensive homes.
