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Is the AmeriDream and Nehemiah Down Payment Assistance in Arizona Going Away?

By Mesa, Arizona Real Estate Mesa Arizona Realtor

Real Estate Broker/Owner with Homes Arizona Real Estate LLC

July 10, 2008 06:34 AM

I was reading an article this morning regarding the down payment assistance offered to many FHA borrowers in Arizona. It seems there is some debate as to doing away with or keeping the AmeriDream and/or Nehemiah program. Typically first time home buyers use the FHA program because only 3% is required as a downpayment, and many are simply unable to come up with that amount of cash. Thus, they ask the seller to contribute through the above-mentioned assistance programs as a "gift."

I've included a link to the article for further enlightenment - as well as the comments thereto by readers of the article.

On the other hand, in our present market with over 52,000 active listings in the Arizona MLS, many sellers are willing to contribute 3-6% toward buyer's closing costs and prepaids just so they can sell their homes. There are many ways that sellers can offer incentives to buyers such as buying down their interest rates, etc.

What are other states experiencing? Are any of them using these down payment assistance programs?

Mesa, Arizona Real Estate. Call me at: 480.216-3334 for information on purchasing or selling a home in Mesa, Arizona or surrounding towns. OR email me: Teri@TeriEllis.com. Feel free to visit one of my websites: HomesAzRE.com, MoveToMesaAz.com or MoveToSunnyAz.com. Or stop by my blogs at: MesaAzRealEstateVoice; or Phoenix Valley Real Estate Blog

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Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Marchel, how weird....I wonder if others are having that problem as well? Thanks for the head's up and for your determination. ;-)

Jul 10, 2008 03:30 PM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Teri, my lending partners here say they are using Nehemiah.

Jul 10, 2008 03:44 PM

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Gary, that's what my loan officer uses as well. Hopefully it doesn't go away. ;-)

Jul 10, 2008 03:56 PM

Carol Lee

Dilbeck Real Estate - Oak Park, CA

Realtor - Agoura, Oak Park, Westlake CA Homes

I haven't used it yet, but as far as I know, it is still around here in CA.

Jul 10, 2008 04:27 PM

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Carol, I would suspect that many of the prices in California are out of range for FHA. What is the FHA ceiling there now? ;-)

Jul 11, 2008 07:44 AM

Mexico Investments

MexiVest - Phoenix, AZ

Most of my first time homebuyers use some sort of downpayment assistance program. Losing this avenue greatly reduces their ability to own a home even if they have good credit and little debt. It's that initial hump that keeps them out of the market for a few months. Though I suspect we'll see housing relief in other forms, and possibly with different names- the short term effect of losing such programs would not be good for the housing market.

Jul 11, 2008 10:22 AM

Carol Lee

Dilbeck Real Estate - Oak Park, CA

Realtor - Agoura, Oak Park, Westlake CA Homes

Teri- The FHA ceiling is $729K and change. Which is pretty reasonable- we have a lot of homes in that price range.

Jul 11, 2008 11:04 AM

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

MexiVest, and many of mine do as well. I fear that more and more buyers will be unable to purchase their own homes if this continues. ;-)

Carol Lee: really? That's amazing......our's - I think - is $400-ish. The difference in states, huh. Of course 3% of 700K is a BIG amount of change; however, with sellers wanting to sell their homes, I suppose $21K might not be a deterrent. ;-)

Jul 11, 2008 11:17 AM

Carol Lee

Dilbeck Real Estate - Oak Park, CA

Realtor - Agoura, Oak Park, Westlake CA Homes

Teri- $400K doesn't get much house out here in Ventura County where I am. Maybe in the outlying areas, but not here!

Jul 11, 2008 11:50 AM

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Carol, I know....I formerly lived in Santa Clarita, so I know what the market is like in California. Sold my home and moved to Arizona.....;-) LOVE the prices here.

Jul 12, 2008 02:42 PM

Debbie Summers

Charles Rutenberg Realty - New Smyrna Beach, FL

Teri - I had 3 sellers last month contribute 6% towards closings and all three used Nehemiah to purchase. If the program goes away... so will the buyers.

Jul 13, 2008 01:39 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

Hi Teri: Because the 100% financing programs have pretty much dried up and the 5% down money is tight, gift programs such as Nehemiah are about the only game left in town. When used in conjunction with FHA, the buyer puts down nothing and pays no closing costs.

I closed a Nehemiah loan last week with the seller paying everything for the buyer. But that was a regular seller, not an REO. I'm finding that REOs will allow Nehemiah, but only to the extent of paying the buyer's closing costs. They aren't as willing to fund the down payment. Buyers who need the entire 6% are better off looking for an individual seller to negotiate with, and those are hard to find with so many REOs dominating the marketplace in some areas.

They've been trying to shut down the Nehemiah program for a while. It's still in jeopardy.

Part of the objection to Nehemiah by its critics is the sales price often ends up inflated to cover the 6% contribution. But in the escrow I just closed, we negotiated $20,000 off the list price, plus the seller contributed 6% out of the balance. And I don't see anything wrong with that.

The seller also pays $599. It went up $100 last month from $499.

Jul 13, 2008 02:46 AM

Tracy Santrock

Santrock Realty Group Inc. , - Cary, NC

Raleigh - Cary Broker

I work closely with an investor from your area and 52,000 listing is unreal to me. We've gone from 13,500 to 18,500 and I thought that was drastic.

Give some of the "down markets" in the US it really makes sense that lendors require a downpayment for the purchase of a home.

Jul 13, 2008 01:52 PM

Eric Murrietta

Homeowners Financial Group USA, LLC - Scottsdale, AZ

Always on the same page. I liked that you asked real estate agents from other states what they were seeing in their markets. Good thing for the right buyers but can have its drawbacks. As does any program with higher risk. Anytime we lend, technically 100% on a purchase price to the buyer, there can be some adverse situations that arise.

Jul 14, 2008 07:00 AM

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Debbie, same experiences here. It is very common for buyers to ask for 6%...and seller jump at the opportunity. ;-) Nehemiah is such a great program for buyers that don't have the funds to come in with $$ for a downpayment.

Elizabeth, good point. REO's are tougher all around.

Tracy, at one time (January 2005), we had less than 7,000 active listings. Look at us now! ;-)

Eric, thank you. ;-) I always enjoy the feedback from others. Thanks for coming by, and for your thoughts.

Jul 14, 2008 12:59 PM

Todd Clark - Retired

eXp Realty LLC - Tigard, OR

Principle Broker Oregon

This program maybe going away everywhere which is really a shame as it has helped many of my first time home buyers become part of the American dream and get a home. I suggest you go to their websites and sign the petition to keep these programs alive that is going on in the courts and through congress right now.

Jul 14, 2008 05:06 PM

BJ Matson

The Choice Group - Olney, MD

Save Ameridream program
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

Jul 22, 2008 06:25 PM

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Todd, hopefully it stays. We need it - for the buyers that actually can afford to make the payments. ;-)

Jul 23, 2008 04:42 AM

Anonymous

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

Aug 04, 2008 06:36 AM

#24

Mesa, Arizona Real Estate Mesa Arizona Realtor

Homes Arizona Real Estate LLC - Mesa, AZ

AzLadyInRed

Thanks for the update....I'll check it out with my lender. ;-) Hopefully it is a REAL fix....;-)

Aug 04, 2008 06:47 AM