Wednesday, May 13, 2009

Developers seek Government-backed loans for buyers

Owners rush to sign on with Federal Housing Authority-backed mortgage program, considered by some to be the best deal in town because it offers 96.5% financing.

New York City developers are seeking to help buyers qualify for federal government-backed loans that allow them to put down less cash, just 3.5%, on a unit. Buildings across the city are applying with the U.S. Department of Housing and Urban Development for approval in the Federal Housing Authority mortgage-backed program.

When buildings are FHA-approved, qualified buyers have access to financing of up to 96.5%—something unheard of in these credit markets. Even Fannie Mae and Freddie Mac have tightened their lending standards. FHA-insured loans provide certain lender protections during defaults.....

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