As you are all aware the "Hope for Homeowners Act of 2008" was signed into law by President Bush and hopefully this will helpful in keeping current homeowners away from foreclosure. It is forecasted that although taking effect October 1st, 2008 that it will be sometime after that before the government and lenders are able to implement the changes detailed in the act.
It is my opinion that we are now going to be faced with 3 major challenges in regards to creating "New Home Owners" once the act takes effect, they are as follows:
1) The termination of Seller-Funded Down Payment Assistance Programs
2) The increase in minimum cash investments on FHA loans to 3.5%
3) A moratorium on risk-based pricing for FHA loans
There are other Down Payment Assistance Programs that are not being effected by this new legislation. These programs are city specific and you would need to research if your city offers one, as of now, Gilbert does not. However, here are some of the programs avialable listed with their repsective agency.
Neighborhood Housing Services of Phoenix a non-profit which assists low to moderate income Phoenicians with Home Buyer Education Classes, Financial Fitness classes and foreclosure prevention/intermediation (Hope Now Program). You may not be aware that Neighborhood Housing Services of Phoenix also administer Down Payment Assistance programs which will not be affected by this new legislation. Housing Our Communites in Mesa offers similar programs, classes and Down Payment Assistance programs. Housing Our Communites will offer grants for both Mesa and Chandler.
For Borrowers who earn less than 80% of the county average median income and who have taken a home buyer education class may qualify for a number of different down payment grants which are either "Due on the Sale of the Property" or are "Forgivable over time" usually 5 to 10 yrs.
Two programs currently available for properties purchased in the City of Phoenix, these two programs can be combined for a total of up to $15,000.00:
The Housing Trust Fund DPA
Up to $5,000.00 down payment/closing cost assistance
Deferred loan, zero interest, due on sale, junior lien
100% Max CLTV
American Dream Down Payment Initiative
Up to $10,000.00 down payment/closing cost assistance
Deferred loan, zero interest, due on sale, junior lien
100% Max CLTV
Two other programs which are forgivable grants available in Maricopa County are:
Individual Development and Empowerment Account Program (IDEA)
Tempe Program - not sure of the full name (ICAN)
3:1 matching grant of borrower savings
Up to a maximum of $15,000.00 down payment/additional down payment and closing costs
Zero interest, no payments, forgiven in full at the end of 5 years.
In addition to these programs there are at least another 20 to 30 programs which can assist the "Low to Moderate" First Time Home Buyer, these funds are made available by city, county, state and federal sources, they are new sources available all of the time and some programs have limited funds. So first come first served really does apply!
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