When I bought my home 9 years ago there was a similar program. The sellers of the house I bought paid $300 of my mortgage the first year, then $200 a month for the second year.  I don't remember now why I needed it since I put 10% down plus closing costs on my $142k purchase. But it enabled me to get into my house and I here I am 9 years later. :)

Glad there is a similar program for today's buyers.

Thanks for sharing Debi!  I always love hearing about other people's experiences.

Mike

Does the house have to appriase for 6% higher than what the sales price is to accomodate these payments?

Chris: The answer is yes if your talking about adding another 6% on top of the current agreed upon price.  Your appraisal always has to back up the full sales price.   However, if the seller is willing to take a cut into their sales price of 6% or something less...it can be structured many different ways.

FYI...UHL is not licensed in Texas.  So you'll have to finder another lender in your state.

I assume the IPC fund counts as seller contributions, therefore lowering the buyer's ability to receive closing cost assistance?

Ian you are correct it is counted as a seller contribution.  However, if the contribution is enough to cover both closing and 6 months PITI then the buyer can have their cake and eat it too!

Interesting.  I guess this is a logical tool since it's merely a seller-contribution used in another way.  Thanks for sharing.

- Tchaka 

Michael, That is an interesting way to restructure the seller contribution. I may give it a try.

No problem Tchaka.

Hope it works out Jennifer.  If you have any questions I can help. 

There was an article in today's paper that these sorts of incentives, which are being used more and more, hide the fact that home prices are falling more than is being reported.  If a $300,000 sells for $300,000 but has $18,000 in incentives that the seller has paid, the market if duped into thinking the house was really worth $300,000 when really, it is only $288,000.  I'm not saying this is good or bad, but not a true picture of the market.

Barbara I'm sure there might be some truth to that in some areas of the country.  However, I would think if that we're true, the banks wouldn't be offering programs like these in the first place. 

Michael, I can vouch for what Barbara's saying.  I read that same article, but will be the first to say it didn't tell us anything we didn't already know.  We've even discussed this before on AR.  Builders refuse to face reality because those who have already purchased will be upset that their values have gone down.  So they offer massive incentives and maintain an elevated price.  I'm sure the banks know it too.  As long as a borrower isn't doing 100% financing, they're able to get up to 6% back.....or the incentives are built into the price of the home, thereby circumventing restrictions.

- Tchaka 

Is it hard for a buyer to qualify for this loan?  My guess it is a full doc loan - no stated income or 100$ financing - correct?

I'm sorry I don't understand the logic that homeowners would be upset by builders offering this program to new buyers.  Last I checked, a home is worth what a buyer is willing to pay, and other current home owners should be happy that houses are moving at the same or higher prices regardless of the incentives being offered.  Would you rather be living in a house in a development where sales are slow and you have lots of brown dirt to look at?  Or would you rather live in a development where the builder is doing everything he/she can sell the plots around you.  I would think the quicker a builder can move homes, the quicker your home will appreciate.

You're right Barry, a house is worth what a buyer is willing to pay for it.  Let's say you buy a house for $300k and  a year later everyone else is willing to pay no more than $250k for it, how would you feel?  90% of these new owners would not be happy particularly since almost everyone expects appreciation.  So what developers do is try to keep the price high and offer incentives instead.  So now a new person will get the house for $290k but it comes with a fireplace, deck, upgraded kitchen, crown molding, etc, etc. 

As for looking at red dirt, that's occassionally the case, but not necessarily the norm.  There are many instances where the home's already been built.  Keep in mind that this applies to townhouses and condos as well.  Not just detached SFHs.

- Tchaka 

I wonder if the seller will pay 6 months of my current mortgage payment if my payment is $3000.00 a month and I get a 6% seller concession on the purchase of thier $200,000 townhome?

Now THAT would be a SWEET deal!

:-)

Since when does a 6% IPC = $50,000 on a $300,000 property.  Let's stick to real math here.  These programs are no different than the seller of a home offering to pay closing costs and then raising the price of the home to cover those costs.  All I know is that if I'm a homeowner in a new development I want to see homes being sold.  And in today's market that's really important, hence you see builders offering incentives.  If I were a buyer I'd be taking advantage of every incentive I possibly could, because it is a "buyer's market".  And prices should sustain themselves.

Barry - log in before you post.

Kris - given that scenario, my question would be what sort of loan you're getting that will require a payment of $3000/mo. on a $200k home.  You're looking at an interest rate of around 18%.

- Tchaka 

Sorry Tchaka.  I'm not a member of this forum, I can't log in.