Death of a Down Payment Assistance Programs. Well, of All Down Payment Assistance Programs

As we all know, the mortgage industry has been turned upside down over the past year and the changes are still coming.  The latest change is a doozie--FHA will no longer allow Seller-Funded Down Payment Assistance programs such as Nehemiah, Neighborhood Gold and AmeriDream, etc.

Why should you care? 

                Applications for government-insured loans, which hit a low in August 2005 with a market share of 5.8 percent, accounted for 29.1 percent of mortgage applications in July, compared with 8.4 percent a year ago and 9.4 percent in January. 

                Down Payment Assistance will no longer be used as of October 1, 2008.  Specific Regulations are as follows:

                SunTrust Mortgage:  DPA Mortgages must be (have been) locked by 08/25/08.

                Countrywide:  DPA Mortgages must have final approval on or before 09/30/08.

                Flagstar:  DPA Mortgages must be registered by 08/29/08.

*Still awaiting news releases from CITI, Nationwide and Wells Fargo.

                Surely, this will not be the last change we see from the mortgage industry but it may just be one of the most significant.   A word to the wise....from now on you'll need your own money to purchase a home!