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FHA Loan Impact From The Housing Bill That Just Passed Yesterday!

The House passed the Housing Bill yesterday with the primary goal of providing a safety net to GSEs Fannie Mae and Freddie Mac and will have an impact on the FHA Loan.

However there are some other important bits to the housing bill.

It will allow The FHA to guarantee up to $300,000,000 (that's 3 hundred billion) for homeowners in financial straights to refinance their mortgage into the FHA Secure Short Refinance Loan. In most instances the current lender would have to take a short payoff to allow for the FHA Short Refinance. In other cases the current lender would take a 2nd mortgage to allow for the difference. Read how the FHA Short Refinance has helped more than 200,000 through May.
It will give states and communities nearly $4,000,000 to buy foreclosed properties, rehab them and offer them for sale at an affordable price.
It will eliminate FHA Loan Down Payment Assistance programs that are funded by the seller through a non profit organization. This will most likely go into effect Friday so from here on out, your buyers really do need 3% down of their own money.

HERE IS A WEBSITE YOU CAN GO TO TO HELP AND VOICE YOUR OPINION ON DAP!
http://capwiz.com/nehemia/issues/alert/?alertid=11598811

Here's a video you might find interesting... Mortgage and Real Estate Video News

Paul Dunn
Tucson's #1 FHA Loan Originator
Arizona USDA Rural Home Loans

Posted by Paul Dunn - Tucson's #1 FHA Mortgage Originator and USDA Rural Specialist on 07/24/2008 10:42 AM

Comments (9)

fha, short refinance, arizona, foreclosure, loan, mortgage, housing bill

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9 Comments on FHA Loan Impact From The Housing Bill That Just Passed Yesterday!

JUL

2008

The DPAs are good till September and it's 3.5% down now, from what I am reading.

I think something had to be done. Now if lenders will start funding loans, I'll be happy!! If you think about it, this came down pretty fast.

That was my next question, will the DPA programs that are in effect right now be tossed out. I got my answer. I have a closing on one of my listings that has a DPA in place. It should close 7/30, crossing my fingers.

We aren't sure of the final dates yet, but in speaking with reps from a two of the larger DAP programs they plan on shutting the doors Friday and honoring anything REGISTERED by Friday in the system through the end of August.

This has been a long tough battle between Congress and the DAP providers. On the positive side, it will open up much more awareness of the USDA Rural Home Loan programs that are available. And really, if someone can't save 3% for an FHA Loan down payment should they be buying a home?

Paul Dunn
Tucson's #1 FHA Loan Originator
Arizona USDA Rural Home Loans

Well written Paul. I agree, people really need to have a personal investment in their home, but I have seen cases where the DAP was the only way to help someone and it worked for them, but most often they really don't work well due to market forces. Thanks for the info.

JUL

2008

Paul,

Thanks for shining a spotlight on the current events with FHA. I'm off to listen to the video link. Your post is useful both for real estate agents and lenders like me.

Mike in Tucson

I just figured out that if you want to watch that video you'll have to go to the date of this post 7/24 as they rotate new topics in every day.

The impact on FHASecure will be mostly political.

Paul Dunn

Hey Paul does the 3.5% requirement go into effect immediately? What about loans that are locked in or in escrow?

At this time, October 1st is the drop dead date. Once we get the update from HUD to verify we will post. There are other down payment sources for assistance and we are waiting for clarification to see how or if they are impacted.

Michael, shoot me an email at paul@tucson-fha-loans.com and I'll put you on the distribution list to get notified of the changes when they occur.

Thanks

Paul Dunn

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