· 10/1/07: HUD issued its Final Rule "Standards for Mortgagor's Investment in Mortgaged Property" eliminating seller-assisted down payment assistance programs.
· 10/1/07: Lawsuit is filed against HUD.
· 10/2/07: HUD clarifies funding dates: "Therefore, 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 purchase price) before that date [Oct 31, 2007]."
· 10/10/07: Motion for Preliminary Injunction and a Motion for Temporary Restraining Order are filed. These motions can stop the Rule from being implemented.
• Recently: The Department of Housing and Urban Development finally gave the green light to the request by AmeriDream Inc., Gaithersburg, Md., to prolong its ability to provide downpayment assistance until Feb. 29, 2008. The new deadline does not include other DPA providers, who are required under a HUD rule to stop their seller-funded DPA operations by Oct. 31.
Dr. Gary Lacefield, Director of Compliance for WR Starkey Mortgage gave further clarification by stating, "The DPA related issues will not effect conventional or any type of government where downpayment funds come from local, state or federal bond or grant programs. I believe that it is the intent of HUD to eliminate all DPA that is seller funded whether the seller contribution is direct or indirect. However, to remain competitive in the market place, we will participate in these types of programs but will be well positioned to change direction as the Feds require."
It would appear that down payment assistance programs are dying a slow death.