I have been farming an apartment complex in Ann Arbor with potential first time homeowners for a few months and have found it difficult to convince them that they do not need a 20% down payment. Our company recently hosted a panel about FHA mortgages which explained how great FHA mortgages can be for first time homebuyers who do not have much savings for a down payment or who have poor credit history.
I am sure that this generation has learned from their parents that you must put 20% down, and even Suze Orman still recommends the same thing for first time homebuyers. Many of the residents in my farm are graduate students/recent graduates who have an enormous amount of debt in student loans and they see no reason why they should invest in a house before paying off all of their loans.
I also worry that the residents think that I am just trying to make money off of them and that I don't care if they get into financial trouble down the line, but I really want them to become aware of the opportunities available in this buyer's market that we are in. I have directed them to many websites with rent vs. buy calculators and also to NAR's new public awareness campaign at http://www.housingmarketfacts.com/.
Any advice or ideas that you have would be greatly appreciated!