A little known fact in Miami is that it is still possible to buy a condo or home without any money coming out of your pocket. Incredible, considering this is exactly what caused the current credit crisis. So, who do we have to thank for making this possible? Good ol' Uncle Sam.
The Federal Housing Administration (FHA) insures loans made to home buyers with as little as 3.5% down. The program was designed to make home ownership affordable for those who didn't have enough money for a traditional down payment. Through the FHA loan program, a local lender originates the loan, the FHA guarantees the payments, and the lender then sells your loan to an investor. In return for the guarantee and low down payment, FHA-insured loans have a higher interest rate than conventional mortgages. Currently, the rate for a 30yr FHA-insured loan is 1/2 percentage point higher than that for a conventional 30yr mortgage. Current mortgage rates can be found here.
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