This past spring, Kathy McBride was hoping to buy a bungalow in Providence so she could move out of a mold-ridden apartment that was exacerbating her severe asthma.
Not only did she buy the home at the end of June – she did so using a 100 percent financing package provided by the Federal Housing Administration and obtained by working with Rhode Island Housing mortgage originator Rob Rocchio.
Using 100 percent financing on the $62,000 short sale meant the few thousand dollars she had deferred by not having to provide a down payment could instead be put toward home improvements, including leaky bathroom pipes and kitchen remodeling, said McBride, who is disabled and not working.
Securing 100 percent financing through FHA, Fannie Mae or through a private lender is an option that, while available for decades, is getting more attention from some borrowers.
Rhode Island Housing, a public agency dedicated to helping individuals, especially with low- and moderate-incomes, find homes, helped 213 buyers secure 100 percent financing loans between January and July, up 28 percent from 154 buyers for that same period in 2012, said Peter Walsh, director of home ownership and customer service.
“The housing market is up in general, plus because of all the tightening in the market and unavailability of 100 percent financing in other places, anybody who wants it would naturally come to RI Housing,” said Walsh.
Nationally, since about 2010, as housing markets stabilized following the crisis and bubble in 2008, “lenders are more willing to take a look at things,” said Deborah A. Imondi, president of the Rhode Island Bankers Mortgage Association, “They do seem to be easing on some standards.”
For instance, here in Rhode Island, the number of vacant homes on the market made the offering of a new 100 percent financing program seem viable for the Wave Federal Credit Union, said Pier-Mari Toledo, director of mortgage lending. Since the instrument was introduced in May, two buyers have closed on properties and at least two more sales are pending, she said.