Loans insured by the Federal Housing Administration offer first-time home buyers the advantage of a down payment as low as 3.5 percent. But rising premiums for the required mortgage insurance have made the loans prohibitively expensive.
Fortunately, borrowers have some alternatives. More lenders are offering their own low-down-payment programs, like the Right Step mortgage developed by T. D. Bank, which operates along the Eastern Seaboard. The lender recently lowered Right Step’s minimum down payment to 3 percent from 5 percent, and raised the maximum debt-to-income ratio to 41 percent, according to Malcolm Hollensteiner, T. D.’s director of retail lending.