Mortgage, anyone?

This is an article found on 9news.com on 3/13/09:

DENVER - The Colorado Housing and Finance Authority (CHFA) is responding to the economic downturn by launching two new mortgage programs aimed at helping low and moderate-income Coloradans buy homes.

Friday, CHFA announced the programs, which provide competitive low-interest financing options and the option for down payment and closing cost assistance to both first time home buyers, and those who have owned before. The new "HomeOpener Program" is available to household earning less than 130 percent of their area's median income. In Denver that's a little more than $94,000 for a family of three. "HomeOpener Plus" is also available for homebuyers who need help coming up with a down payment or covering closing costs. CHFA says they're excited to offer this, since many lenders can't right now. "We are one of the very few entities that can provide down payment assistance, particularly since the federal government is now prohibiting quite a few programs that they deem to be not suitable for certain borrowers," explained Roy Alexander, the executive director and CEO of CHFA. Homebuyers must also meet several requirements to qualify, including a minimum credit score of 580 and maximum debt-to-income ration of 45 percent on manually underwritten loans. They must also take a financial education class. "We pride ourselves on making sure that educated borrowers are making the right decisions about their long term assets they they're purchasing," he added. CHFA says all of these new requirements are to ensure the agency keeps pace with current lending standards, so that the program doesn't inadvertently attract subprime lenders or borrowers.
CHFA HomeOpener and HomeOpener Plus are available through CHFA's statewide network of lenders, CLICK HERE for a complete list or call CHFA at 800-877-2432.
(Copyright KUSA*TV, All Rights Reserved)
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I found this interesting....pulled it from a website:

Understanding your debt-to-income ratio
36% or less: This is the ideal amount of debt for most people to carry.
37%-42%: This is okay, but start cutting your spending now before you get into deeper debt. 43%-49%: Financial distress is right around the corner unless you act quickly to prevent it.
50% or more: You need professional assistance to severely reduce your debt.
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Now...does anyone see anything wrong here? This company, HomeOpener Plus is doing EXACTLY what got us into this housing mess in the first place.

1. Lending to someone with credit score of 580? You shouldn't be able to finance a bottle of water with a score like that.
2. Financing down payments? Isn't that a bit odd? Shouldn't we be avoiding mortgages for people that don't have a down payment and NOT give them financing for the mortgage AND for the down payment?
3. Financing someone who has a DTI of 45%??? That's completely nuts!

This is all just asking for the same trouble we're in already with the housing mess.