As the Washington Post reported yesterday, and the Sacramento Bee is reporting today, HUD, the US Senate, and the US House of Representatives are making another attempt to ban downpayment assistance - this time through legislation. This latest attempt to ban downpayment assistance is a small element of a much broader housing bill to re-vitalize Freddie Mac and Fannie Mae, and modernize FHA practices, among other things. SA 4387 amends HR 3221, which Congress is expected to pass in the coming weeks.
I received an email from the Nehemiah Corporation last night asking for help - literally to call our congressional representatives. Here is the link provided in that email if you would like to make contact with these representatives.
Luckily this will not affect any of my current clients. I will say though, that past clients of mine have used these types of programs, and they do serve a great purpose. One client had plenty of cash in the bank, but just had a baby and wanted to hang on to their savings. Another client was waiting for an inheritance. Another client had money tied up in a CD. It is also a creative way to make a 100% Financing situation work...for those of you hiding in caves, most forms of straight 100% Financing are no longer available.
If you are currently looking for a home and are planning to use some form of downpayment assistance, OR if you are already in contract for your home and you are using downpayment assistance, pay very close attention to what happens with this bill. I am under the impression that if President Bush signs this once it hits his desk, its effects will be IMMEDIATE. Nehemiah is not the only program that will be affected. There are other programs, such as Ameridream, Grant America Program, and Partners in Charity, etc.
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