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Make your voice heard today! Save the Down Payment Assistance Programs

HUD has proposed yet another rule trying to eliminate charitable down payment assistance programs like AmeriDream, Nehemiah and other Down Payment Assistance Program which are Seller Funded!

This action will prevent nearly One Million qualified homebbuyers across America the opportunity to own a home. Take action today and tell HUD the negative impact their proposed rule will have on you and your customers.

After more than 15,000 comments opposing the last proposed rule and being defeated in two lawsuits, HUD is still trying to eliminate homeownership opportunities for homebuyers throughout America.

Tell HUD that they are wrong again! As you know, many depend on the help and hope charitable down payment assistance programs provide.

Tell HUD to make sure that AmeriDream and other similar programs remain in place so that the promise of homeownership remains a reality for the individuals and families FHA was created to serve.

Tell HUD today that you support homeownership and tell them to find a way to keep down payment assistance programs such as AmeriDream. The comment period ends August 15, 2008, please make your comment now.

Go to www.supporthomeownership.com to make your voice heard. Your Comments Could make a Difference!

Save Ameridream and other Down Payment Assistance programs 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!

Posted by Raleigh Real Estate Zero Down on 07/07/2008 08:46 PM

Comments (12)

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12 Comments on Make your voice heard today! Save the Down Payment Assistance Programs

JUL

2008

Maybe I am incorrect, but when I scanned the new proposal a few days ago, it seemed as though HUD had expanded the list of people that a buyer could get assistance from. I'm not sure I follow the logic that says it is ok to get a gift from a family member but not the seller. Or that says you must have 3% to put down, but you can now get the 3% in the form of a loan.

This is where that piece between socialism and capitalism gets confused. It appears that anything that the government confuses with good intentions gets mess ups. I wish that there were a generic pill for bureaucracy.

JUL

2008

There needs to be better clarity on how this program works. Where does the money come from? The program or from the seller increasing the price and passing it along to the buyer anyway?

the programs are pretty clear. The borrwoer received their downpayment froma non profit third party, like AmeriDream or Nehemiah and the DPA wires it to the closing table on behalf of the borrower generally the day prior to closing. The attorrney or escrow officer verifies receuipt of the wire, which makes it HUD compliant and because it is a non profit, it complies with the FHA requirements for gifts from a third party.

The seller agrees to replenish those funds through his/her net proceeds at closing plus a small processing fee. The buyer and seller agree upon a price like any other real estate transaction. I the buyer wants the house enough to pay more than list prices, and if the value is supported through the apprasial (which I can tell you it will be loked at pretty close if the buyer is paying over list price in this market) then so be it, that is between buyer/seller and agents. NOW if a loan officer advises a borrower to pay more than asking price, then that is a sticky area.

at the end of the day I am a huge proponent of the DPA. Millions of low to moderate income would Americans would be left of simply because they didnt have enough cash to close and pay closing costs.

JUL

2008

To ask the seller to "replenish the funds" is basically a counter offer on behalf of the buyer. What really happens is that the seller raises their list price to match the contribution. Buyers need to be aware that this is not a free program- there needs to be disclosure on behalf of the buyer's representative to this fact- if it this happens to be the case.
Now if the seller says, "Yeah, I'll knock another 3% off the price to cover DPA" then the buyer is in essence getting down payment assistance. Otherwise, the buyer is paying for it. They're getting into the house, but they're paying for it.

Not that this is bad thing. Like you said Ricardo, a lot of people are left out in dust because they didn't have the money for a down payment. This is a good program for low income buyers and first time home buyers. In the end home owners go a long way in giving back to the economy. If you gotta pay a little more to get into your first house so be it.

If your a buyer's agent make sure you completely understand how this program works. I would even put in the Buyer Agency agreement, "Buyer is participating in a DPA program."
This also must appear in the sales contract as "Seller agrees to participate in DPA program..." under additional provisions with the exact numbers and who's paying for what.

those are some good comments Noqui but I think you have missed one critical component. Let's say you are correct, and lets say the buyer offers 103% of the list price for the home, or better yet, lets say they offer 100% list price and ask for 3% back in contributions, in neither case is the buyer paying MORE for the house than the seller is asking for or what the buyer is willing to pay because remember, the additional funds are being given back to the borrower DIRECTLY in the form of down payment or closing costs assistance and thus is a direct buyer benefit. The seller benefits by selling their home. See the case study below;

Home List Price; 100,000

Buyer offers 103,000 and asks for 3% Down Payment Assistance (3,090)

Buyer obtains loan for $99,910 or the difference buyer didnt actually pay more than 100,000 for the house did he? In this case he actually paid less than 100,000. In this case the seller actually netted 100% of their asking price.

This next case study applies specfically to my friend in Durham and others in the Triangle because at this time, sellers are typically receiveing 97% of their asking price (convenient I know for this example, but those are the numbers)

Home List Price; 100,000

Buyer offers 100% @ 100,000 and asks for 3% DPA

Buyer takes loan back for $97,000 and actually pays 97% of the list price.

Seller is happy, buyer gets to buy a puppy!

If you dont like the private party DPA, there are always government agencies like NCHFA which I am certified in their FirstTime Homebuyer DPA programs and other charity programs, then good old fashions family members and what is that last one, it's right on the tip of my tounge, SAVINGS FOR YOUR FIRST HOME! Remmeber, this is only ONE way to garner your downpayment and it may not be right for you. If you have questions about your circumstance or that of your clients, dont hesite to call me directly at 919-559-3384.

Ricardo Cobos
Mortgage Banker
(919) 559-3384
http://findRDUhomes.com

Your right Ricardo, I would consider offering full asking price on the house, considering the seller is contributing 3%. Most times sellers end up contributing towards closing in some fashion.

If you have any clients that need a Realtor, please let me know. Gracias!

www.realestateinthetriangle.com

JUL

2008

Hopefully they can keep this program going for a little longer.

JUL

2008

Save Ameridream and other Down Payment Assistance programs
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

great information! thanks for the heads up. Ricardo

Ricardo thanks for letting us now what was happening. I have taken actiona dn I hope we all do as we need all of the help we can get

AUG

2008

a new bill, The FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 was introduced by several members of Congress on Thursday, July 31, 2008. Representatives Maxine Waters, Gary Miller, Al Green and Christopher Shays sponsored this bill that if passed and signed into law will allow downpayment assistance to continue indefinitely.

Scott Syphax, President and CEO of Nehemiah Corporation of America praised this group earlier today.

"Maxine Waters, Gary Miller, Al Green and Christopher Shays have demonstrated the willingness to understand all sides of this issue and the courage and leadership to follow their conscience. All those who understand the importance of working class American's having their shot at homeownership, need to work together to encourage our elected officials to pass this bill."

Click here to help and contact your local elected officials, http://capwiz.com/nehemia/issues/alert/?alertid=11598811

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