Zillow offering a 1% down payment loan product
Zillow is now offering a loan program which allows home buyers to buy a house with as little as 1% down.
Looks like this product is a regular conventional loan where the buyer will bring 1% of the down payment, and Zillow will contribute the remaining 2% of the down payment (handled through closing, not as a direct payment to buyer).
As far as I can tell this down payment assistance will not ever need to be repaid. The only catch is that the borrower needs to be a first time home buyer, they need a minimum 620 FICO, and they need to complete an online education course. Also, at this time this is only offered to buyers in Arizona, but they plan to expand to other states soon.
Seems like a great option for first time buyers. What do you guys think?
Most Popular Reply
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
Yup. This will definitely drive up prices and make buying homes harder for those on the low end looking for somewhere to live. And at least these buyers will be starting 5-10% underwater if they should want to sell. Luckily we learned from the past and aren’t subsidizing home purchases for those who can’t really afford it. And there’s obviously no chance of a recession where these buyers would get crushed. At least we’re not that dumb.