IONEGARM, we would have a much healthier economy if downpayments were required to be at least 20-50% of the price of a home. Or there were no restrictions on the downpayments, but absolutely no government guarantees (FHA, FNMA…) or other subsidies for reckless lending. I am not saying this out of loyalty to a political belief, but because it would cause much better incentives in the housing and lending markets, and that would ultimately lead to a wealthier future for us all.
If someone cannot save at least 1/5 of the price of a home before they buy it, how can they ever be expected to pay for all of it, and still take care of their retirement, health care, kids, etc.? For every 1 buyer who gets a home early because of subsidies to enable low downpayments and responsibly ends up paying for 100% of their own retirement and kids etc, there are at least 10 buyers who do not.
