The new housing stimulus is set to take effect Oct. 1, and its impact will be felt by both homebuyers and builders. Under the provision, FHA can no longer insure mortgages in which the down payment comes directly from the seller or other interested party. According to the National Association of Realtors (NAR), down payment assistance from family members, government programs or charities that are not seller funded is still permitted. Seller-funded down payment-assisted FHA loans have a high default rate. NAR reported that the default rate on these types of loans was more than 28 percent last year, about three times the default rate on FHA loans without seller-funded down payment assistance. While homebuyers will be affected, It's believed that the provision will impact home builders the most. Many builders offer down payment assistance as a way of depleting inventory.They've basically been offering manufacturer rebates similar to those offered by car manufacturers.
Greg Fisk - REALTOR
EXIT First Realty(Edgewater)
69 Mayo Road, Suite 201
Edgewater, MD 21037
Cell: 410-507-7262
Office: 410-956-9888
Fax: 410-956-9850
www.FirstExitRealty.com
;)
;)
