That’s right according to everything I have found online thus far come October 1st 2008 FHA DPA (Down Payment Assistance) will be gone. That is if the overwhelmingly popular housing bill passes as it is expected to do in the next few weeks.(It has already passed in the house 272-152 on July 24th) Apparently this little piece of legislation which is a part of the soon to be passed housing bill will remove DPA programs like the popular Ameridream gift program from being used on FHA Loans.
Now things may be different where you are in the country but here in Kansas City, MO FHA is a huge deal. For instance, I got 3 houses under contract in the last 4 weeks. All of them are FHA with DPA. DPA is very important to my client base because while most of them have steady employment and fair credit it is difficult for them save up 3% as a down payment. In many cases without DPA many of my buyers may never buy a home or at least won’t be able to buy a home for several years.
In addition to taking away DPA this bill will also increase the required 3% DPA for FHA to 3.5%. Now this may not seem like much but consider this. The average home sales price nationwide is about $208,000. .5% of that comes out to be $1040. I don’t know about your buyers but the majority of my clients don’t have an extra $1000 laying around especially if they can’t get assistance for the other $6,240.00
I hope that what I am seeing here is wrong and that DPA is really not being cancelled and if anyone can prove me wrong I would be delighted to give you excessive praise. Honestly it would be great weight off of my shoulders. But still I am doubtful that anyone will be able to disprove what I am seeing here. However if you can disprove what I am saying leave your links so I can check your work.
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