BUSINESS
11/22/2009 05:12 am ET | Updated May 25, 2011

USDA Mortgages: Zero-Down Government Loans Called "Subprime Beef"

Builders and lenders are dusting off a familiar pitch: mortgages with $0 down and 100% financing. The deals, which take advantage of a little-known loan program at the U.S. Agriculture Dept., are bolstering sales in some areas. These new mortgages share some characteristics with the old ones now wreaking havoc on the housing market--and critics fear lending standards could slip. Says Daniel Oppenheimer, an analyst with Credit Suisse: "Unlike beef, these loans should be described as USDA subprime."

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