Do FHA loans allow people to buy homes when they can't afford it?

I read that you only need to put 3% down for an FHA loan. This number seems really low. If you can't afford a decent down payment, then maybe you can't really afford the house. Why do people feel they are entitled to own a house???Do FHA loans allow people to buy homes when they can't afford it?
Possibly... but they could also help people who can afford a house but for whom it would take a long time to save up a downpayment. Some people move from renting to buying a home and end up paying less on their mortgage than they did for their rent, so why shouldn't they be able to afford that house?





To be honest, there's really nothing wrong with the theory of no downpayment loans. If a person can afford all the mortgage payments, why should they have to save up a down? What if they have saved up 15%, so they have enough for the FHA and closing and a decent savings after, but they aren't quite there for putting down the regular 20% (which means having much more than 20% actually available)?





Why should people be allowed loans of hundreds and thousands of dollars just because they have 50 grand to put down? Does that automatically mean that they will be able to pay off all that other money? No, they are just as able to come into hardships and be at risk to lose their home.





Granted, this practice harms the banks more, when the buyers bankrupt before building up any appreciable equity.





It's the people who default that make you look down on these programs. These can absolutely be helpful, especially for first time home buyers who end up wasting lots on rent that could have been spent on a mortgage because they need to live somewhere but can't afford a downpayment.Do FHA loans allow people to buy homes when they can't afford it?
Kudos on not just looking for someone to agree with your answer. I definitely did not expect a BA.





I do understand what you're saying, and agree that these low/no downpayment loans probably end up hurting more than they help, but there are definitely cases where they make perfect sense.

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You are absolutely correct, if you can't afford the down payment and closing costs, then you shouldn't be buying a home. Suze Orman would tell you that if you don't have at least 6 months of payments over and above what it costs you to get into the home in some reserves, then you aren't capable financially of affording a home either. If the furnace takes a hike, the cost to replace is on you.
FHA is not meant to be a product for people who shouldn't own a home. It's really meant for first time home-buyers or buyers who have good income and credit but not a big down payment.





The new down payment, effective 01/01/2009 os 3.5% but you'll still need fully documented income and at least a 620 credit score. You'll also need some reserves in the bank and/or retirement accounts so that you have something to fall back on if you were stuggling with your payment.





FHA is actually a very good loan product right now and is helping us get through this housing mess.
the down payment is now 3.5% and yes i agree but that is the rules for FHA as you pay mip for ever on these loans that covers the lender
welcome to the mortgage disaster.