Developer in Florida Would Sell New Homes for $1 Down

And guess what? The government pays the developer in full and gets stuck for the rest if the purchaser walks away. You couldn't make this up.
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Isn't this partially what contributed to the burst of the housing bubble in 2007? The latest Florida mortgage deal carries a potential taxpayer burden that could leave you wondering what happened to the last four years.

Earlier this month, The Daily reported a plan being developed in Cape Coral, to address the community's vast real estate problems. It's no secret that Sunshine State has been hit hard with a double whammy of depreciating home values and astronomical foreclosure rates.

A large developer in the Southeast region of the country, Adams Homes believes it has come up with an attractive solution. The program, nicknamed "A-Dollar-and-a-Dream," would allow prospective home buyers to purchase a brand-new $150,000 home (model below) with a down payment of $1.

According to The Daily's report, the developer stands to lose nothing as they receive the full purchase price, regardless of the buyer's ability to continue making mortgage payments. This risk in this scenario is assumed by two government programs (in other words, you the taxpayer) that guarantee the loans for those who want a house but lack the cash for a standard down payment and closing costs.

The deal provides for two different mortgages. The first comes courtesy of the Federal Housing Authority, which services a mortgage for 96.5 percent of the purchase price. The second involves a smaller federally insured loan covering some or all of the down payment and closing costs.

In other words, prospective homeowners have very little to lose under this arrangement, and thus very little reason to remain in the property should they ultimately have trouble making their payments