It's still possible to buy residential real estate in Brooklyn with a 3.5% down payment, according to an ad on the front page of Brownstoner.com for this building at 100 Engert St. in Greenpoint, Brooklyn. A financing worksheet from the Web site from GFI Mortgage Bankers Inc. describes a scenario in which a buyer puts down 3.5% for a $475,000 one bedroom apartment in Greenpoint. The interest rate is 5%. "They will run out soon," the Web site advises. But hope springs eternal.
Truth is, if some lender and some borrower want to make this bet, I wish them both good luck -- so long as the taxpayer doesn't have to bail out either party if the bet turns out badly, and so long as those living in less expensive apartments, or renting, aren't subsidizing these deals somehow. Maybe someone more familiar with the mortgage market can explain if there's a hidden subsidy here somewhere, whether via Fannie Mae, the Federal Reserve, or the Federal Housing Administration. The last 3.5% down deal we saw in Brooklyn was advertised as an FHA project. The whole thing makes me suspicious, but maybe I am missing something.
