Zero Downpayment Pilot Program Act of 2006

The Zero Downpayment Pilot Program Act of 2006 (H.R. 3043) proposed a trial program allowing the Federal Housing Administration (FHA) to insure mortgages for first-time homebuyers that required no down payment. Under this bill, eligible borrowers could finance 100% of a home’s appraised value, along with related closing costs and service fees, for single-family homes, condominiums, and manufactured housing.

To protect borrowers and the government’s financial interests, the bill required participants to complete independent homeownership counseling before applying for a loan. It also established strict limits on the program, capping the number of insured mortgages at 50,000 and requiring the program to be suspended if foreclosure claim rates exceeded 3.5%. While the bill passed the House of Representatives in 2006, it did not become law.