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Nehemiah - AmeriDream -- The Down Payment Programs live on...!!!!!!

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With yesterdays news that the new FHA loan limits were increased, and that Judge Lawrence K. Karlton upheld Nehemiah's motion against all down payment assistance programs to be banned, it's been a very good week in the mortgage industry.

Here is part of the letter from Scott Syphax (President & CEO of Nehemiah) who states:

Judge Lawrence K Karlton of the United States District Court for the Eastern District of California upheld Nehemiah's motion for summary judgment. The Court Clerk's Office is directed to enter judgment and close the case.

To be clear, the U.S. Department of Housing and Urban Development's (HUD) rule to ban private down payment assistance as proposed in the "Standard's for Mortgagor's Investment in Mortgaged Property" regulation published October1, 2007, is permanently set aside.

Now, what the average consumer needs to understand is that they truly need to work with a mortgage professional that truly knows all programs in and out. Especially with so many recent changes to conventional mortgages in the last several weeks, it is not easy nor may it be your cheapest method in obtaining a mortgage. If you have credit scores under 680 or your credit is less than perfect, you want to make sure that your lender is FHA approved. If they tell you that you aren't approved for a FHA mortgage, but that they can approved you for a conventional mortgage, that should be a major red flag.

Overall, I am not saying that conventional mortgages are bad and that FHA mortgages are great. But the proof is in the pudding when it comes to the bare facts. You can truly understand my point just on these two examples.

FHA mortgages vs conventional mortgages -- 3% down comparision

FHA mortgages vs Conventional mortgages -- 5% down Comparison

Top 10 reasons FHA is a great way to finance your home....

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Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 03/07/2008 11:41 AM

Comments (27)

Down Payment Assistance Programs in the Mortgage / Finance Channel

nehemiah program, fha nehemiah, ameridream, nehemiah loans, nehemiah loan grants, fha loan limits, fha mortgages, fha home mortgages

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: Nehemiah - AmeriDream -- The Down Payment Programs live on...!!!!!!

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27 Comments on Nehemiah - AmeriDream -- The Down Payment Programs live on...!!!!!!

MAR

2008

I was happy to hear the judge ruled in favor of down-payment assistance. I think it's a great tool for consumers to be able to use.

This was good news to receive! I read several blogs about this yesterday!

I read about this - good news!

Jeff,

This is good news!

Now what we need is for some one to take HUD to court to eliminate the middle man. If a seller is willing to put up the down payment why should they have to pay an expensive middleman?

In the mean time let's all be thankful for what we've got.

Bill

I agree and let's hear it for FHA! It is the definite clear choice now - especially for 1st time homebuyers. Conventional is not always the best option.

EUGENE.... I think it's a great tool.... I will use it whenever I can and when a client needs it.... but I really do think that the consumer should have something in a deal, no matter what. Maybe a $1,000 dollars in the transaction?

RICH..... I just never had time to write about this because I was both busy and under the weather. But yes, it was good news.

SHARON..... yes, great news, but read my comment to Eugene. Thanks for stopping by.

BILL..... lol... well, first off, I think it would go against their gift policy then, that you can only get 100% gift from a family member or from a non-profit organization. And curious... you say that these programs are expensive? They only cost about $500 to $600. For someone not saving any money, this in my opinion is a small price to pay.

NAOMA..... as it stands, I don't see too many people doing conventional unless they have a credit score above 680. Even in declining markets and scores above 680, you might be limited in your down payment and have to put more money down.

Jeff,

If they cost $20.00 they are still a slide of hand. Your figures are allot less than the last I saw several years ago. I would never question your accuracy.

The reason I suggest court action is because it is against there rules. Don't confuse non-profit with philanthropy. These non-profits are in business to make money,they are not giving away any thing of there's just enabling a sham.

I'm all in favor of using the program, my only question is why, when everyone knows where the money comes from can't we change the rules and eliminate the sham?

Bill

Jeff,

I was glad to see this ruling come out in favor of the consumer. If the judge would of ruled in the other direction, the mess were in would be start to get worse. Like it's not bad enough.

I hope you are feeling better or at least beginning too. Being sick or even feeling run down is awful. This is a good post.

Jeff, There is so much to keep up with in the mortgage business people absolutely need a professional...I'm sure those that are reading you will choose you to help them find their best options.

I'm an advocate for non-profit down payment assistance, so when I see comments like Bill's it really gets me going. First of all, ALL organizations that give down payments have to have a 501(c)(3) tax status, meaning that are a charitable non-profit organization...they don't have shareholders to pay dividends, and have been through IRS scrutiny to get that designation. What most people don't understand, including Bill, is that successful non-profits have excellect business models that generate revenue for their programs that help sustain them. Most of these DPA organizations put OVER 85% of revenues back into their programs. When you consider that other non-dpa non-profits typically don't even come close to returning that high percent of revenues back into their programs its hard for me to sit back and let Bill trash DPA...even though he is ok with using these programs.

Jeff, This is great new! I was wondering if the program was going to get eliminated. Thanks for the update.

Abel,

"First of all, ALL organizations that give down payments have to have a 501(c)(3) tax status, meaning that are a charitable non-profit organization." What is charitable about taking money from the seller and "giving" it to the buyer for a fee? In fact it's not charityrt at all it's a contract for services!

If the seller doesn't contract to give money to the "charity" then the "charity" doesn't "give" anything! If the seller doesn't go through with the closing the "charity" gets their money back!

You are right it takes a 501(c)(3) tax status to "give" money to and induaviaul.

That's the only thing you're right about! I didn't trash the "chairty" they have done allot of good. It's the need for this slight of hand that I questioned. The down payment comes from the sellers equity, why should we have to play games? For a fee no less!

Non-profit doesn't mean charity or for free! Tell me what charitable function any of these DPA orginzations preforms!

Bill

Jeff - This will be a great tool to help offset the ramifications of the "declining value area" delineation. Thanks for a great post.

I don't think that we've seen the end of this yet. Still waiting for congress to make a definitive stand, but we'll see what happens in the long run. I don't think that this is dead.

Jeff, yes there was a lot of news this week. And more to come. AJ

MAR

2008

Definitely good news! (But someone has their knickers in a twist) I sure have read a lot of posts about FHA this week. You're usually the only one I see with anything to report.

Jeff,

It is great to see that the program is still going. Keep up the good work - Helping people aquire the Amierican Dream.

Shaun

Great news ! Thanks for sharing...this is certaintly the new " buzz"

Whoa, there are some interesting comments on this one! Anyway, I think this is good news; we need to be adding tools right now, not taking them away.

Thank you for this valuable information on the down payment assistance program.

MAR

2008

Well whoopie that the court decided with downpayment systems but who cares as almost the entire US is in a declining market and one of the policies is that if the house you choose is in a declining market then yo ustill can't use the downpayment assistance programs.

I promise to get back to everyone else's comments.... just been busy and sick. But I wanted to address Charles comment.

CHARLES...... whose policy? Nehemiah doesn't say who can lend to what... and FHA doesn't say that you can't lend in a declining market. It all comes down to the appraisal. As long as the appraisal has the correct comps and is done properly, there is no issues. And I state Nehemiah because I use them for my down payment assistance programs.

So, I am just wondering where you are getting this kind of information. Are you a lender? A realtor? Just a consumer?

You are correct that declining markets do hurt loans, but only conventional loans.thanks

APR

2008

Hey Jeff,

All of Florida is in a declining market but FHA is still viable here. As you said, it comes down to the appraisal. Sounds like Charles has had some negative experience, possibly with a lender that doesn't know or can't do FHA loans.

MAY

2008

There's another DPA program you might want to consider using - it's called American Homebuyers Inc. (http://americanhomebuyersinc.com). They deliver the same service as Nehemiah and AmeriDream (which are my old favorites), but they do have a couple of advantages. 1) They're cheaper (only $295); and 2) each loan using American Homebuyers gift funds includes their comprehensive default management program which is provided by Mortgage Savers, their loss mitigation company, at no extra charge!

The Mortgage Savers service program will do "work out packages" for borrowers who get behind on their payments, and helps to keep delinquent borrowers from default and foreclosure! I find that to be a very valuable no-cost benefit to home buyers who need DPA to buy a home. While many think they willnever need it, having the reassurance that assistance is available if they eve need it - and at no cost - makes this a very viable DPA alternative.

They also offer a Homebuyer's Education Course, an Early Default Counseling Course, and a Foreclosure Prevention Course for home buyers. Each course is $19.95. It's worth checking it out.

MAY

2008

Can FHA loans be used for buying investment properties? Any down payment assistance available for investment properties?

MAY

2008

Shiela:

The short answer is no.

FHA loans are for single family owner-occupied primary residences only. Buyer can buy a 2-, 3-, or 4-Unit property so long as s/he will live on one of the units as his or her primary residence. The rent from the other units can be used to help qualify for the mortgage.

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