I was watching the Nightly Business Report last night and there was one segment in particular that caught my attention -- FHA's No Money Down Loan Program

Here is how the program currently works: Let's say you qualify to make the monthly mortgage payment on a $350,000 house based on your credit score, debt-to-income ration and some other factors. However, you don't really have enough money saved up to meet the down payment and closing costs requirements of an FHA loan (3% or, in this case, $10,500). Currently, there are a number of non-profit, down payment assistance programs like the Nehemiah Program or Ameridream that will give - that's right, give - you the money to make your down payment.

However, the money these programs receive in order to give to you come from the Seller of the house.  So, the Seller kicks in the down payment money plus a small administrative fee and the non-profit, down payment assistance program gives you the money.

Of course, this all hinges on the Seller being willing to kick in the extra money but, in this market, many Sellers are willing to do whatever it takes to get their homes sold. 

Now, here comes the kicker.  FHA, the government agency that backs up these mortgages, is not at all in favor of these down payment assistance programs.  In fact, they tried to shut them down but the Nehemiah Program won a lawsuit against HUD to keep the programs in place.

Yet, it seems like HUD and the FHA are still fighting to shut down these programs.

What this means is that the already small pool of buyers available to buy homes may get even smaller if these down payment assistance programs go away. This is especially important for people in Prince George's County and College Park.  Our county has been hit hard by the mortgage industry shake up.  Tightened credit standards may be a great idea, in theory, but in real life it is keeping a lot of people who have not saved up much money from buying a house.

There are probably people who can keep up with the monthly payment of a mortgage but just have not saved up enough money for a down payment. That's where these down payment assistance programs come in and help.

Here's the bottom line:  if you've been thinking about buying a house but you've been waiting for the "perfect moment" you may want to consider sooner rather than later.  If the FHA is successful in getting rid of Nehemiah and Ameridream buying a home will be that much more difficult.