First Time Home Buyer Resources (Part 3– Seller Funded Down Payment Assistance)

Seller Funded Down Payment Assistance programs are being eliminated as allowable sources of down payment. As of December, 2007, FHA programs will still allow AmeriDream and Nehemiah Seller Funded Down Payment Assistance programs as acceptable down payment sources, but only until February 28, 2008 for AmeriDream. Fannie Mae and Freddie Mac do not accept Seller Funded Down Payment Assistance as acceptable down payment sources on their programs.

Down payment assistance providers Nehemiah Corp. of America, of Sacramento, Calif., and AmeriDream Inc., of Gaithersburg, Md., sued the government Sept. 30 and Oct. 1, respectively. U.S. District Judge Paul Friedman granted a preliminary injunction barring the Department of Housing and Urban Development from enforcing the new rule until he rules on the AmeriDream case.


The Nehemiah Program provides gift funds for down payment and closing costs to qualified homebuyers using an eligible loan program, such as FHA, that allows gifts from charitable organizations. Gift Funds of 1% to 6% of the final contract sales price can be received, depending on the particular needs of the homebuyer.

AmeriDream's Down Payment Gift program provides up to 10% in gift funds for down payment and closing costs to qualified homebuyers.

Fannie Mae, Freddie Mac and HUD believe that the costs to the Seller associated with these programs inflates the market price for the homes, but the program providers believe otherwise. Some companies have found loopholes in the program guidelines and are continuing to promote their down payment assistance programs as being acceptable sources of down payment as they originate through Native American tribes or represent "earned income" versus being sourced from Seller payments.

California and Florida homebuyers and sellers have been very active participants in these programs.

 

See you at the closing table!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com

 
Post is included in group: Creative Financing, Grants Deal Closers

5 Comments on First Time Home Buyer Resources (Part 3– Seller Funded Down Payment Assistance)

I had read that they were going to eliminate these programs. I can't say that I don't agree as to why they are getting rid of them. It will hurt definitely hurt some people who want to buy a home but at least there are other programs available.   

01/07/2008 02:16 PM by Rick Grand (Oregon Real Estate Properties)

Rick - Like you, I can't say I'll miss these programs. I've investigated them, but never had any buyers use them. With so many of the past several years being a seller's market, not many sellers would have a reason to pay the fees associated with these programs. I had a lot more inquiries on these back in the 90's, but again, the market turned to a seller's market and I stopped getting requests. In today's market, I think this is the best time for these types of programs, but now the secondary market is disallowing them. Next to "location, location, location", I think we have "timing, timing, timing". Thanks for the comment.

01/07/2008 03:52 PM by Karen Cooper - Quality Home Loans, Inc.

Karen, I have a couple questions. I have seen in your previous post where you endorsed the Oregon Bond program, I also think its a wonderful program. My question then is, can you layer the Oregon bond with Nehemiah downpayment assistance?  Meaning can I as a buyer chose the rate advantage and use nehemiah for the downpayment and closing?  Please tell me what you think.

02/17/2008 10:51 PM by Dalton

Dalton - the "jury is still out" on the Nehemiah/Ameri Dream Seller funded down payment assistance programs. We'll likely know more by the end of next week. If you meet the criteria, maybe the Oregon down payment assistance program would be an option for you to look at along with the Rate Advantage program.

02/22/2008 10:00 PM by Karen Cooper - Quality Home Loans, Inc.

Save Ameridream program
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 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

07/23/2008 01:30 AM by Maryland homes for sale, Montgomery County MD real estate

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Mortgage Company: Karen Cooper - Quality Home Loans, Inc.
Karen Cooper - Mortgage Consultant OR/CA
Ashland, OR
More about me…
Karen Cooper - Quality Home Loans, Inc.

Office Phone: (541) 608-6003
Cell Phone: (541) 601-4303
Email Me
25 years experience providing Quality Home Loans to Southern Oregon and California| Assisting First Time Home Buyers in need of Down Payment Assistance in Oregon| Specializing in Oregon Bond Loan| Oregon VA Loans| Serving all of Jackson County Oregon including Ashland- Talent- Phoenix- Medford-Jacksonville- Ruch- Central Point- White City- Eagle Point- Shady Cove- Gold Hill, as well as Josephine County including Grants Pass- Merlin- Wilderville and Northern California communities in Siskiyou County| Helping Southern Oregonians and Californians on the road to fulfilling the American Dream of Homeownership

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