Many months ago I expressed my frustration with Congress and HUD when legislation was passed to do away with downpayment assistance programs such as the Ameridream program. Those of us who have been in the industry for a while worked with many of these programs under names such as Nehemiah, HART, Ameridream and others.
According to the Ameridream site, since Congress abolished these programs in October of 2008, over 90,000 prospective home buyers have been unable to make a purchase.
The arguments against down-payment assistance programs (DAPs) revolve around a larger number of defaults on these loans and concern about over-inflated appraisal values. Both of these could easily have been addressed with stricter qualifying requirements and more in-depth appraisal review.
Opponents say "they should just save up their down-payment", but in a market such as King County, where the average sales price is $450,000, that's a HUGE amount for a young individual or couple to save. At the required FHA 3.5% down-payment, that's $15,000 needed for down-payment alone. And rents aren't cheap in our area either, which pushes the ability to purchase further and further away without these DAPs.
Before Congress right now is H.R. 600 "FHA Seller-Financed Reform Act of 2009", which if passed, according to Ameridream could help as many as 300,000 home buyers, stabilize market prices and create hundreds of thousands of new jobs.
It's a matter of common sense in my experienced opinion.
Let's not throw the baby out with the bath water....tougher credit scoring and underwriting guidelines along with home buyer education should be implemented. But there is a place for DAP's in the market and I hope Congress is willing and able to see the forest for the trees.
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Colleen Fischesser is the Broker/Owner of RE/MAX Select Real Estate. She has been successfully marketing and selling real estate in King and Pierce counties since 1990.
Copyright 2009, all rights reserved. Not portion may be reprinted without written permission.
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Colleen Fischesser is the Designated Broker amd Owner of RE/MAX Select Real Estate. She has been successfully helping clients buy and sell real estate in the greater Seattle Washington area since 1990 and specializes in South East King County including the communities of Covington, Renton, Auburn, Kent, Ravensdale, Black Diamond & Maple Valley. Voted by clients and industry professionals as one of Seattle Magazine's 5 Star, Best in Client Satisfaction for six years running, she and her team rank in the top 50 of RE/MAX teams in the entire Northwest region. Colleen is committed to remaining on the cutting edge of real estate marketing and technology while providing value-added, personalized service.
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Behind on Payments? We May Be Able to Help!
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Colleen: I think we'd all be better off now if DAPs (with a few tweaks to guidelines) would have been in place a couple of years ago, then the way people got mortgages and into homes based on 'no guidelines' approach we witnessed.
With the economy as it is and the cost of living, problem is... it's the ultimate challenge to save money fast enough to get to a down payment.