Appearing in the Detroit Free Press on May 31, 2024, Susan Tompor interviews Sarah Bolling Mancini, NCLC’s co-director of advocacy for a story on zero-interest down payment loans for first-time homebuyers.
“The biggest risk is that people might not understand that it does have to be paid back eventually. It’s possible that they might not understand at the outset that this is a loan.”
Sarah Bolling Mancini, co-director of advocacy for the National Consumer Law Center
Mancini warns that some borrowers might easily forget the terms if they take on the second lien when they buy the home but aren’t reminded of it as they’re making payments on it each month.
Mancini also expressed concerns that some consumers who aren’t able to save enough for a small down payment might not be fully prepared for unexpected, major expenses associated with homeownership, such as a broken water heater, and then they’d end up taking on high cost credit card debt to cover repairs.
In general, though, she said that offering a 0% program could be promising and might provide broader access to homeownership for some buyers. But she said buyers who qualify should first look at mortgage programs that offer grants that would not need to be repaid.
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