# Low or no money down government assistance for home buyers another bubble to burst?



## WhatInThe (Jun 17, 2019)

The government and taxpayers are still in the home sale industry subsidizing buyers using little or no money down. Problem is many of these recipients are considered risky borrowers. Their credit scores have declined and debt has increased. Some is normal for getting a mortgage but the rate of use has significantly increased over the years. Also in a time of short supply and rising home and rental prices many of these programs are making matters worse by fueling inflation and taking up supply.

https://www.foxbusiness.com/persona...derwriting-standards-as-credit-scores-decline

https://www.wsj.com/articles/home-buyers-get-government-help-with-down-payments-11560677400

What's really frustrating these programs are not just going to people who really really need 'a' home it's enabling many to get a more expensive home of their choice which increases their chances of default or not being able to handle a major financial event. And again fueling inflation by increasing demand with subsidized buyers on the market.


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## Rosemarie (Jun 17, 2019)

I'm still trying to work out what all this house-building is really about. The government is cutting down trees and destroying farmland in order to build houses, yet they declare they are concerned about  climate change. Are all these new houses really needed. Where I live, there are a lot of run-down, unoccupied houses. Why are they not renovated and sold at a realistic price?  If people need houses, they also need food, yet agricultural land is being built on. The whole thing doesn't make any sense to me.


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## WhatInThe (Jun 17, 2019)

The housing market has been contrived since around the change of the century. The problem with assisting on down payments is that if a person can't even afford 5% down and that's low what are they going to do come any financially stressing event. Not just talking about house repairs but when they need a car, a medical event, kids college etc. The people who don't need it but use it fuel inflation by soaking up supply. The real estate industry loves this crap because they profit. The agents get commission on inflated housing prices as do the sellers.


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## WhatInThe (Jun 18, 2019)

Part of the issue with these programs/subsidies is that the people who really really need it still get left out. The issue should be affordable housing but the market which is contrived at this point will not allow it. Subsidies help put a floor on prices and rents.

https://www.citylab.com/equity/2015...s-than-it-does-on-affordable-housing/390666/s

Any government program should not be to facilitate middle class living but basic survival and living. Should a middle income home buyer be able to get the same assistance someone working around the minimum wage? These programs seem to be missing their target customer and desired effect. They wind up being nothing but facilitation for sellers and landlords.


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## Don M. (Jun 18, 2019)

Half the people seem to have little or no savings, and large amounts of debt....credit cards, student loans, etc.  However, they still find ways to drive new cars, and drink their $4 Latte's at Starbucks.  The banks offer loans on housing to those who can barely afford to buy a new dishwasher without going even further into debt.  All this adds up to another "housing bubble" looming on the horizon....and then, when, not if, it happens, these banks will go crying to the government for yet another taxpayer "bailout".


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## WhatInThe (Jun 18, 2019)

Don M. said:


> Half the people seem to have little or no savings, and large amounts of debt....credit cards, student loans, etc.  However, they still find ways to drive new cars, and drink their $4 Latte's at Starbucks.  The banks offer loans on housing to those who can barely afford to buy a new dishwasher without going even further into debt.  All this adds up to another "housing bubble" looming on the horizon....and then, when, not if, it happens, these banks will go crying to the government for yet another taxpayer "bailout".



That's the thing. Life goes on outside the sale or purchase of a home. True keeping a roof over one's head should be a priority and/or even assisted if need be. But I think many of these things are another example of just throw money at a problem(unaffordable housing). They hide it or slip it in under the guise of home ownership. A politician's feel good word/spin. 

What's really bothersome or troublesome here is that many sellers and those in real estate industry profit off these programs. Cut off their money train the sellers and realtors will cry foul and after a tantrum or two will keep their handouts for political expediency.


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## Aunt Bea (Jun 18, 2019)

These programs are always a double-edged sword.

They help to stimulate the economy by increased jobs in everything from lumber to appliances but in many cases they set the cash strapped buyers up for failure.  

IMO if you haven't demonstrated your ability to save money for a downpayment you will not be able to save/budget in order to maintain/improve a property.  

I also believe the less skin you have in the game the more likely you are to just walk away when the going gets tough.

I think that it would be much better to provide young people in K-12 with basic money management, life skills training, etc...

People need to learn how to work for the things that they need and want instead of looking to the government to take care of them from the cradle to the grave.

At least the clouds seem to listen! layful:nthego:


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## applecruncher (Jun 18, 2019)

^^Excellent post, Aunt Bea.


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## OneEyedDiva (Jul 7, 2019)

Aunt Bea said:


> These programs are always a double-edged sword.
> 
> They help to stimulate the economy by increased jobs in everything from lumber to appliances but in many cases they set the cash strapped buyers up for failure.
> 
> ...


As usual I agree with your reply Aunt Bea.  Seems there would have been a lesson learned from the last fiasco of that saw so many bankruptcies but I guess not.


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