Want an infinite margin investment loan? It's still possible, 102% the value of the home guaranteed for the lender by the government!
In response to America's Housing shortage., I'm posting the following:
Supply and demand in a relatively free market is a result of the price level.
To say supply of something is too high, you have to also say at what price. Saying we have a glut right now is saying that supply is too high _at current price levels_, or the converse, that demand is less than supply _at current price levels_.
Normally, you'd fix that by prices adjusting lower until supply and demand matched.
So the actual important question is not "Why do we have a glut", but, "Why are housing prices higher than they should be to balance to market?"
I would point to housing market distortions like banking regulations, mortgage bailouts, tax credits for purchasing homes, mortgage interest rate deductions, mortgage "readjustment" regulations, environmental and "affordable housing" policies (in some local areas).
I would also point to the additional penalties (financial and credit/reputational) currently associated with selling a house for less than the mortgage on it. Of course, that's a result of mortgages loans with too much margin for any "investment", which is a result of so many other factors that most are familiar with.
You may have some other ideas.
If you went to a stock broker and said, "I want to buy $250K worth of stock and I'll put $1K down in order to do so to cover the paperwork costs", they'd laugh you out of the place. Somehow our current government policy is that they will not only encourage 33 times(VA loans) to infinite times (USDA 102% loans) purchases on margin, they'll actually provide a loan guarantee for some of them!
If this sounds financially crazy, that's because it is. It's your tax dollars at work!