Jim O’Reilly — A radical housing finance proposal

I propose that the government end its loan insurance program for finance and start financing the homeowner directly.  There’s nothing inherent in the laws of the universe which decrees a home must be expensive, risky, and difficult to acquire.  So, how about  this?  Anyone who wishes to buy a home simply makes a down payment, perhaps 5%, and the remainder is automatically financed by the government at 0% interest.  No principal payment would be required either, so there would be no monthly payment, no underwriting requirements, and no additional hassles....

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A radical housing finance proposal

Jim O’Reilly

I have proposed this on various occasions perviously. I would not even say it is radical. It's a no brainer now that government agencies conduct most of the mortgage business in the US — after private institutions showed they were not up to the underwriting. Why farm out risk management to firms that cannot handle it?