More home buyers getting down payment help from the government, like that which contributed to the Great Recession

See Home Buyers Get Government Help With Down Payments: Share of purchasers drawing on assistance programs across U.S. doubled from 2013 to 2016. Excerpts:

"Those who use down-payment assistance start out with little or no skin in the game. As a result, some economists and analysts worry that buyers have less incentive to keep making payments if times get tough. In recent years, those who used government down-payment assistance for FHA loans were delinquent at a higher rate than those who didn’t, government data show.

“Someone who can’t come up with a down payment is far more likely to be living paycheck to paycheck,” said John Burns, founder of John Burns Real Estate Consulting in Irvine, Calif."

"Many federal, state and local programs operate through housing finance agencies and nonprofits. They vary by region, but typically offer some amount of cash to buyers who qualify and structure it as a second loan. Some forgive it after a period of time while others require repayment. Sometimes, the program provider charges an above-market interest rate on the mortgage to recoup the money put toward the down payment."

"Down-payment assistance funded by sellers became fertile ground for abuse before the housing market collapsed. Sellers routed money to buyers through nonprofits and then tacked the cost onto the purchase price. The federal government has since prohibited the practice.

Still, FHA Commissioner Brian Montgomery, who had the same job during the financial crisis, has been closely watching risks associated with FHA loans. In a report last year, the FHA said it was concerned about government programs that operate on a national level “in ways that generate benefits for the provider,” and “increase costs, but not benefits, to the borrower.”"