NEHEMIAH® Gift Funding for down payment assistance is available for any buyer who qualifies for an FHA mortgage loan.  Typically, most buyers request the minimum down payment assistance of 3% however; the gift can be up to 6% in assistance or can be used to supplement a down payment.  For instance, if a buyer has 2% of their own money and wants to use it for a down payment, NEHEMIAH® can be used for the remaining 1%.

The wording used in the purchase agreement is critical in obtaining the funding.

The monies for NEHEMIAH® should be divided into two parts:

1. The request for the gift funding
2. The request for the additional money for the administrative fee that goes back to NEHEMIAH®.  In order to obtain money for down payment assistance the following clause must be written under "further conditions" on page 3 of the purchase agreement:

"Seller agrees to repay NEHEMIAH® Gift Foundation for 3% of purchase price to be used for down payment assistance.  Seller further agrees to pay an additional $499.00 to the NEHEMIAH® Gift Foundation for administrative costs."

If the buyer wants their closing costs paid as well the amount for the closing costs should be put in the blank on line 25 on page one of the purchase agreement.  This does not need to be restated under "further conditions".

I have seen the $499 administrative fee put into line 27 of the purchase agreement as it is a fee that the borrower can not pay-If you list it here it needs to be asterisked and referred to under "further conditions".  It must be clear on the purchase agreement that this is an administrative fee and not a closing cost.

***You will note that in the portion of "further conditions" in which you request the NEHEMIAH® funding I have put in 3% instead of a number.  The reason for this is that given offers and counter offers, if you use 3% you will not have to change a hard number every time the offer goes back and forth.  If a hard number is used and not changed that will be the amount that is given for the NEHEMIAH® funding whether it is 3% or not.

 Call me for more information:

David Mennen
Mortgage Consultant, Owner

Tippecanoe Mortgage, Inc.
1221 S. Creasy Lane, Suite J
Lafayette, IN 47905

(765) 448.3200
(765) 448.6398 fax
dmennen@tippecanoemortgage.com

www.DavidMennen.com

#1 Home Finding Service on the Web!

Tippecanoe Mortgage is The #1 FHA Lender in Tippecanoe County - Since 2003!