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FHA UPDATE & INFORMATION

By Kris Krajecki

Mortgage and Lending with Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL

October 22, 2007 02:28 AM

HUD issued a final rule amending the regulations regarding specific standards for a mortgagor's investment in property which is to be insured by FHA.

The rule defines a prohibited source of down payment assistance as a payment that consists in whole or in part, of funds provided by any of the following parties before, during or after close of the property sale: the seller; any other person or entity that benefits from the transaction; any third party or entity that is reimbursed directly or indirectly by the seller.

In order for the homebuyer to use a gift that was derived from the seller, the homebuyer must have entered into a contract of sale (including any amendments to the purchase price) prior to October 31, 2007. Due to previous agreement between HUD and Nehemiah Progressive Housing Development Corporation, if Nehemiah is providing a seller-derived gift for down payment assistance, the sales agreement must have been signed on or before March 31, 2008.

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Gary Miljour

American Financial Network, Inc. NMLS#207208 - Southern Pines, NC

Mortgage Originator NMLS Licensed in AZ and NC

Kris- Ameridream just annouced that it will be able to continue to work with DPA's until February, 2008. Just an FYI.

Oct 22, 2007 02:40 AM

Bruce Miller

Friendly Appraisals - Acworth, GA

Kris,

Can you put that in Lamens terms? No offense, but it looks like you copied and pasted it. It loses me(not that that is too hard to do anyway☺).

I am gathering that the DPA is GONE? I thought FHA was allowing 100% financing which would erase the need for it anyway.

I am only responding because I need to know this stuff-as an appraiser too!

Oct 22, 2007 02:43 AM

Kris Krajecki

Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL - Huntley, IL

Mortgage Broker Huntley, IL

FHA has decided to no longer allow Down Payment Assistance (DAP) programs. This basically requires borrowers to have the 3% down payment required for FHA loans. Before, you could use one of several DAP programs to subsidize the 3%, which effectively allowed for Zero Down Payment from the borrower.

Oct 22, 2007 02:52 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

What happens after the March 31st. Is there other options for FHA buyers?

Oct 22, 2007 02:53 AM

I thought FHA was loaning 97.75%-leaving a down payment of 2.25%. But I recently heard they were going to allow for 100% up to like $429k houses. Not sure, please clarify. BTW- THANKS for this info!

Oct 22, 2007 02:56 AM

Daniel J. Brudnok, REALTOR

Berkshire Hathaway Home Services Fox & Roach, REALTORS - Exton - PA License #RS-225179-L / Delaware License #RS-0025038 - Downingtown, PA

SRES, e-PRO,ABR,GREEN,CSP

Thanks for the update.....changes that will have an effect on our business for sure.

Have a great day.

Oct 22, 2007 02:58 AM

Juan Valdez

Priority Bail - Perth Amboy, NJ

No DPA and no more 100% Financing Programs

means less homeowners

Oct 22, 2007 03:05 AM

Gita Bantwal

RE/MAX Centre Realtors - Warwick, PA

REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

This means we have a few more months for Nehemiah program.Thanks for sharing.

Oct 22, 2007 10:58 PM

Carl Pruitt

FHA Loan Advice - Buford, GA

http://FHALoanAdvice.com

Bruce - There is legislation moving slowly through Congress to lower FHA's down payment to 1% or 0%. However, it seems to be stalled at the moment.

FHA allows a 97.75 LTV loan, but that is a little deceptive. It still requires the buyer to have a 3% investment in the property and the 3% can be a gift. However, if part of the buyers 3% goes toward closing costs, the loan amount can be raised by .75%.

Oct 23, 2007 02:56 PM

FHA UPDATE & INFORMATION

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Kris Krajecki

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