20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down

**Jason** · 10-21-2009, 02:39 PM

Denise Tejada bought a house last month at the age of 20, thanks in large part to a loan guaranteed by the Federal Housing Authority.

This story offers a dramatic demonstration that, despite the housing bubble causing the worst economic downturn in generations, the ideology of home ownership is alive and well in the United States and still being supported by the government.

Without question, Tejada's loan is toxic--to her and to the taxpayers who are backing the loan. Her house cost $155,000. Tejada's loan was apparently made on a micro-down payment of just 3.5%, the minimum down payment to qualify for an FHA loan. On top of this, however, she got an additional government backed loan to make improvements. Her total loans amount to $183,0000. In short, she was immediately underwater on her new house.

The monthly payments on her debt amount to $1328. Her income is $2470, leaving her with just $285 a week to live on. She's paying 54% of her income to make the mortgage payments. She earns that income by holding down one full time and two part time jobs. Obviously, this woman has a strong work ethic. But it also means her income is precarious. With unemployment still rising, she obviously should be worried about losing one of her three jobs. A loss of one of them would likely leave her unable to make the debt payments.

Tejada appears to be using imaginary numbers about the value of her house. She says that when she bought it, the house was just a “box” with no kitchen or bathroom. Now it is "gorgeous". She claims the renovation has increased the value of her home from $155,000 to $255,000.

"I bought my house for $155,000. And now, after all the fixing, after all the remodeling, my house is worth $255,000. So just within a month period, I made a $100,000," she tells Market Place's Scott Jagow.

http://www.businessinsider.com/20-ye...5-down-2009-10

FreeNerd · 10-21-2009, 02:48 PM

lovely... round 2 here we go!!!!!

Pulse loans baby!

**djaburg** · 10-21-2009, 04:05 PM

Of course you don't make squat until you sell, she still has to pay the note regardless of how much her investment has (allegedly) increased in value.

**-=Rousseau=-** · 10-22-2009, 11:33 AM

How'd she pay for the supposed renovations? You can't increase a house's value by $100k by reorganizing and repainting... Doesn't sound like she'd have the cash to do it right, so... how?

**djaburg** · 10-22-2009, 02:43 PM

Did you read the post?
"Her house cost $155,000. Tejada's loan was apparently made on a micro-down payment of just 3.5%, the minimum down payment to qualify for an FHA loan. On top of this, however, she got an additional government backed loan to make improvements. Her total loans amount to $183,0000. In short, she was immediately underwater on her new house."

Rataru101 · 10-22-2009, 03:03 PM

Quote:

Originally Posted by FreeNerd

lovely... round 2 here we go!!!!!

THIS!

Jesus, when will it end?

10-21-2009, 02:39 PM	#1 (permalink)
Jason Faugh a ballagh Join Date: Dec 2001 Location: Pasco, FL Posts: 8,491 OS: Windows Vista My System Blog Entries: 2	20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down Denise Tejada bought a house last month at the age of 20, thanks in large part to a loan guaranteed by the Federal Housing Authority. This story offers a dramatic demonstration that, despite the housing bubble causing the worst economic downturn in generations, the ideology of home ownership is alive and well in the United States and still being supported by the government. Without question, Tejada's loan is toxic--to her and to the taxpayers who are backing the loan. Her house cost $155,000. Tejada's loan was apparently made on a micro-down payment of just 3.5%, the minimum down payment to qualify for an FHA loan. On top of this, however, she got an additional government backed loan to make improvements. Her total loans amount to $183,0000. In short, she was immediately underwater on her new house. The monthly payments on her debt amount to $1328. Her income is $2470, leaving her with just $285 a week to live on. She's paying 54% of her income to make the mortgage payments. She earns that income by holding down one full time and two part time jobs. Obviously, this woman has a strong work ethic. But it also means her income is precarious. With unemployment still rising, she obviously should be worried about losing one of her three jobs. A loss of one of them would likely leave her unable to make the debt payments. Tejada appears to be using imaginary numbers about the value of her house. She says that when she bought it, the house was just a “box” with no kitchen or bathroom. Now it is "gorgeous". She claims the renovation has increased the value of her home from $155,000 to $255,000. "I bought my house for $155,000. And now, after all the fixing, after all the remodeling, my house is worth $255,000. So just within a month period, I made a $100,000," she tells Market Place's Scott Jagow. http://www.businessinsider.com/20-ye...5-down-2009-10 __________________ Posting Tips \| Advice for New People \| Common Fixes \| Agus na damnaithe fágtha gan focal Glaoigh ormsa i measc na naomh

10-21-2009, 02:48 PM	#2 (permalink)
FreeNerd Registered User Join Date: Sep 2009 Location: Denver, CO Posts: 238 OS: Windows 7/Vista/XP	Re: 20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down lovely... round 2 here we go!!!!! Pulse loans baby! __________________ “Criticism is something we can avoid easily by saying nothing, doing nothing, and being nothing” ~ Aristotle

10-21-2009, 04:05 PM	#3 (permalink)
djaburg TSF Enthusiast Join Date: May 2008 Posts: 1,323 OS: XP SP3/Vista/7 Server 2K/2K3/2K8	Re: 20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down Of course you don't make squat until you sell, she still has to pay the note regardless of how much her investment has (allegedly) increased in value. __________________ Computers make it easier to do a lot of things, but most of the things they make it easier to do don't need to be done. The inherent vice of capitalism is the uneven division of blessings, while the inherent virtue of socialism is the equal division of misery.

10-22-2009, 11:33 AM	#4 (permalink)
-=Rousseau=- Biker, Geek and Jock Join Date: Jun 2006 Location: Nashvegas Posts: 827 OS: Windows 7 Ultimate My System	Re: 20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down How'd she pay for the supposed renovations? You can't increase a house's value by $100k by reorganizing and repainting... Doesn't sound like she'd have the cash to do it right, so... how? __________________

10-22-2009, 02:43 PM	#5 (permalink)
djaburg TSF Enthusiast Join Date: May 2008 Posts: 1,323 OS: XP SP3/Vista/7 Server 2K/2K3/2K8	Re: 20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down Did you read the post? "Her house cost $155,000. Tejada's loan was apparently made on a micro-down payment of just 3.5%, the minimum down payment to qualify for an FHA loan. On top of this, however, she got an additional government backed loan to make improvements. Her total loans amount to $183,0000. In short, she was immediately underwater on her new house." __________________ Computers make it easier to do a lot of things, but most of the things they make it easier to do don't need to be done. The inherent vice of capitalism is the uneven division of blessings, while the inherent virtue of socialism is the equal division of misery.