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The Zero-Coupon/Interest-Only Fixed-Rate Mortgage: An Alternative for Funding Low-to-Moderate Income Housing

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Abstract

This proposal sets forth a concept for the public/private finance of owner-occupied, single-family homes for first-time homebuyers utilizing federal guarantees and private sector mortgages. Proposed funding requires no new tax revenues. The security that the program revolves around is a Zero-coupon/Interest-only Fixed-rate mortgage (ZIF). The ZIF has the potential to improve the allocation of resources for subsidizing low-income housing, to reduce risk exposure to rapidly declining property values, and to improve the self-esteem of a group of Americans who have been depressed for far too long by making homeownership a reality.

Suggested Citation

  • Stephen F. Thode & Richard J. Kish, 1994. "The Zero-Coupon/Interest-Only Fixed-Rate Mortgage: An Alternative for Funding Low-to-Moderate Income Housing," Journal of Real Estate Research, American Real Estate Society, vol. 9(2), pages 263-276.
    • Handle: RePEc:jre:issued:v:9:n:2:1994:p:263-276
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    References listed on IDEAS

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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