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So long Ameridream.....I'll miss you!

By
Managing Real Estate Broker with Keller Williams Realty

HUD has recently ruled that DPAOs (Down Pay Assistance Organizations) such as Ameridream are no longer welcome in FHA deals.  Now I have read the entire ruling (Read it right before bedtime if you are an insomniac, it'll put you right to sleep) and I clearly understand HUD's position.  But could the timing be any worse? 

For those of you not familiar, DPA programs such as Ameridream allow an FHA buyer to purchase a home with little to no money down.  This is accomplished by negotiating a down payment assistance grant from the seller to Ameridream.  In turn Ameridream agrees to grant a Down Payment Grant to the buyer.  If you've also negotiated seller paid closing costs into the deal, your buyer can essentially purchase at zero down with FHA financing.  Yes I see how the waters can get a bit murky here.

 In defense of the DPAOs, I can tell you that these programs have helped many renters turn into first time buyers.  I've had many of these deals over the last year and a half here in Tacoma and I can tell you that all of my clients are still paying their mortgages.  We're not dealing with non owner occupied stated income loans here!  We're dealing with folks on the lower end of the pay grade and helping them get a rung up on the equity ladder.

We now have until Oct 31 to close any outstanding DPA contracts in escrow, unless Ameridream wins an injunction, they are effectively out of business come Nov 1.

I'd be interested in others comments positive or negative about this latest HUD ruling.  What's your 2 cents on this subject?

You can read about the struggle here on Ameridream's website.

Comments (9)

Barry Shapiro
Broker-Associate - Camarillo, CA
This is the kind of post that makes AR what it is.  A forum to exchange information.  Thank you, Brett!
Oct 08, 2007 04:40 PM
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003
Brett, They'll bring it back, just as soon as we don't need it so much. Cheers,
Oct 08, 2007 05:10 PM
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
REALTOR, PBD SFR SRS
Brett Nehemiah is still out there for about another 6 months look into it!
Oct 08, 2007 09:45 PM
Keith Perry
Coldwell Banker - Hiram, GA
REALTOR - West Metro Atlanta

Nehemiah is still able to operate until March 2008. If you are using Ameridream you must have a signed contract close before Oct 31, 07. Hopefully by spring someone will figure it out.

Oct 08, 2007 11:01 PM
Anonymous
C Perez

AmeriDream, Inc. filed its second action against HUD today seeking a temporary restraining order in an effort to halt the enforcement of the regulation issued by HUD on Monday, October 1, that essentially robs future low- to moderate-income homebuyers of a safe, sound source of downpayment assistance.  the full text of the brief is available on AmeriDream's websit, www.ameridream.org.


AmeriDream continues to fight for an industry it has worked so hard to support and will continue to help provide affordable housing opportunities to homebuyers throughout this fight.  Everyone can get involved by contacting your Congressman and voicing your support for this important cause at www. ahaanow.org.

Oct 10, 2007 08:40 AM
#5
Brett Tousley
Keller Williams Realty - Richland, WA
Tri Cities Real Estate | (509) 420-0013
Ameridream has been given a voluntary extension until Feb 29 2008.  You can read more about their fight here on their website.
Oct 24, 2007 02:14 AM
BJ Matson
The Choice Group - Olney, MD

Save Ameridream and other Down Payment Assistance programs
If you haven't done so, go to this website, http://www.rallyforhomeownership.org/

It only takes 30 seconds.  This form will go to your local Congressmen and Senators.
CONGRESS MEETS ABOUT THIS TODAY! 

HUD should modify to lessen the risk BUT don't get rid of it.  This is one of the last loan programs out there right now that can get buyers into a home with no money.  (They still have to credit and income qualify)

http://activerain.com/blogsview/605114/Down-Payment-Assistance-Congress
MORE ON THIS STORY IN THE WASHINGTON POST

Jul 22, 2008 06:50 PM
Brett Tousley
Keller Williams Realty - Richland, WA
Tri Cities Real Estate | (509) 420-0013

We'll have to hope for a reprieve at this point.  We still have a couple of 0 down options for home buyers, but DPA's were the most effective tool to help folks get into their first home.  The tax credit/0 interest loan will not fill the shoes of the DPA organizations.  This legislation will leave more renters in apartments futily trying to save 3% to buy their first home.

Aug 02, 2008 09:34 AM
Anonymous
Anonymous

a new bill, The FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 was introduced by several members of Congress on Thursday, July 31, 2008.  Representatives Maxine Waters, Gary Miller, Al Green and Christopher Shays sponsored this bill that if passed and signed into law will allow downpayment assistance to continue indefinitely. 

Scott Syphax, President and CEO of Nehemiah Corporation of America praised this group earlier today.

"Maxine Waters, Gary Miller, Al Green and Christopher Shays have demonstrated the willingness to understand all sides of this issue and the courage and leadership to follow their conscience.  All those who understand the importance of working class American's having their shot at homeownership, need to work together to encourage our elected officials to pass this bill." 

Click here to help and contact your local elected officials, http://capwiz.com/nehemia/issues/alert/?alertid=11598811

 

Aug 04, 2008 06:22 AM
#9