Where Low Down Payment Loans Are Easiest

In some metros, home buyers are putting less down on a home purchase than in other areas, a new report from the Urban Institute shows.

Read more: Survey: Save for 3 Years for a Down Payment

The study, which uses data from CoreLogic, covers the period between May 1 and May 31 of this year and identifies the mean origination FICO score for each metro area. The area’s loan-to-value (LTV) ratio was also factored in to determine how low the down payments actually were (e.g. higher the LTV, the lower the down payment).

Overall, the metros struggling the most economically had the lowest FICO scores and lowest down payments, the study found.

“What you’re seeing is a reflection of the lower economy,” says Sheryl Pardo, spokesperson for the institute. “(The Federal Housing Administration) is an important player in those local communities … it’s helping people get on the ladder to home ownership.”

The Urban Institute identified the following seven metro areas as having the lowest down payment averages:

Detroit-Dearborn-Livonia, Mich.

• Average FICO score: 728
• Average loan-to-value: 90%

Miami-Miami Beach-Kendall, Fla.

• Average FICO score: 732
• Average loan-to-value: 84%

Cleveland-Elyria, Ohio

• Average FICO score: 733
• Average loan-to-value: 88%

Las Vegas-Henderson-Paradise, Nev.

• Average FICO score: 735
• Average loan-to-value: 88%

San Antonio-New Braunfels, Texas

• Average FICO score: 736
• Average loan-to-value: 90%

Houston-The Woodlands-Sugar Land, Texas

• Average FICO score: 736
• Average loan-to-value: 86%

Cincinnati, Ohio-Ky.-Ind.

• Average FICO score: 736
• Average loan-to-value: 89%

Source: “10 Cities Where Low Down-Payment Mortgages Are King,” Credit.com (Sept. 10, 2016)