This is a BIG deal for home buyers who may just not have a lot of cash on hand for a large down payment. This is the first time banks are allowing a 5% down payment since the housing crash of 2007.
“After the housing bubble burst, buyers needed to come to the table with as much as 20% down or they had to turn to the Federal Housing Administration for a low down-payment loan.” CNN-money
While the loans were far too risky for private lender to take on before, rising home prices have lessened the risk. Bank of America, Wells Fargo, and TG banks are among the banks reportedly offering mortgages with down payments as low as 5%