Training Opportunities in Affordable Housing

Need CEU's?  Interested in Affordable Housing Issues?

As part of our goal of promoting and advancing successful home ownership in Minnesota, we periodically highlight training and continuing education opportunities for real estate and housing professionals. Today, we’d like to highlight three upcoming workshops/seminars:

1. 2010 Affordable Homes Congress
Attend the 2010 Affordable Homes Congress to get the answers and information you need to succeed in affordable housing today.
     When: October 14-15, 2010
     Where: Radisson Hotel and Conference Center Minneapolis
                 3131 Campus Drive, Plymouth, MN 55441
     More Info: Online information here
                           ** CEUs have been applied for**

 2. Homes for All 2010
Homes for All 2010 seeks to build a community platform to affirm the belief that all Minnesotans deserve a safe, affordable place to call home; connect resources and stakeholders; and create sustainable communities.
     When: November 8, 2010
     Where: St. Paul RiverCentre
     More Info: http://www.homes-for-all.org/index.html

3. Fourth Annual Emerging Markets Homeownership Initiative Summit
The EMHI Summit event is designed primarily for Realtors, lenders, non-profits, government, and others working in the homeownership arena. Hear a comprehensive analysis of the current status of emerging marketing homeownership in Minnesota; learn from panelists and speakers about opportunities and successes in serving emerging markets.
     When: December 8, 2010
     Where: U of MN Continuing Education and Conference Center
     More Info: http://hocmn.org/en/emhi-summit-2010.cfm
           ** CEUs have been applied for**

Subprime 2.0?

Edward Pinto, the Chief Credit Officer of Fannie Mae back in the 1980's, has written an Op-Ed for Bloomberg titled "Subprime 2.0 Is Coming Soon to a Suburb Near You" that talks about no-money down and lowered credit score requirements for government-backed loans.  [Fair warning: this op-ed is takes an EXTREMELY negative view of the loosened underwriting standards that became prevelant in the mid-2000's.]

One of the more interesting quotes in the article is where he cites the number of no-money down mortgages (or extremely low-money down) as a percentage of all loans:

In 1990, one in 200 home-purchase loans (all government insured) had a down payment of less than or equal to 3 percent. By 2003, one in seven home buyers had such a low down payment, and by 2006 about one in three put no money down.

Visually... this is what I've come up with:
 

Click to Enlarge

Now... Pinto believes we will to return to an environment of subprime lending that he refers to as “Subprime 2.0,” as the FHA continues to accept borrowers with low Fico scores and minimal down payments.

For example, the FHA’s average down payment is just 4 percent,” he wrote. “Even this meager amount disappears after adjusting for seller concessions and financed insurance premiums.

Pinto is calling for a return to hefty down payments - - a minimum of 20 percent down, with few exceptions, and believes documentation should be “iron-clad."

NOW, couple of questions for our readers (feel free to voice your opinion in the comments): 

• What would this mean for those of us working on affordable housing issues? 
• Would this cause more problems than it solves?
• Are there other solutions to affordable housing... that don't involve simply lowering lending standards? 

One of the conferences that takes up the issue of affordable housing... and discusses related policy issues is the "Homes For All" Conference.  You can learn more about the conference here.