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FHA loan changes in the near future..... Part 1 of 3 - Down Payment Assistance Programs

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Are you ready for some more changes in the mortgage industry? Many of us know that there has been a lot of change, both with FHA loans and conventional loans. And the changes that I am about to mention have already been out there for about a month now, but this is more of a refresher post of information. These are changes that will start to take place next week and up until January 1st, 2009.

Is change good? Yes and no..... The first major change as of right now is that down payment assistance programs will be discontinued for now. As you noticed, I said discontinued and not banned. HUD and the government wanted to ban these programs, more so because of HUD's misleading figures. This is something that I have proof of and that I will write about in the next few days. Hence why I went to Washington D.C. to help keep the DPA programs alive. For more info, please read:

Mr. Belonger Goes To Washington! By Patricia Kennedy

Video : Down payment assistance rally - 9/10/08 - with Jeff Belonger

down payment assistance programs

As of now, there are some gentleman handshakes on the table between Congressman Barney Frank and the rest of the Senate in regards to bringing back these down payment assistance programs. Right now, they end on October 1st, 2008. But with the help of so many individuals such as you and me, and Scott Syphax of Nehemiah, the DPA's should be back by the end of the year. (this is my opinion)

What will the new DPA look like and what is being talked about? Some other things that HUD supports as a compromise to bill HR 6694 are :

Borrowers with a credit score above 680 will be allowed to participate in these down payment assistance programs with no penalties.
Borrowers with credit scores from 620 to 679 could be subject to higher insurance premiums. (I personally wouldn't have a problem with this)
Borrowers with credit scores below 620 would be banned from using the down payment assistance program until mid 2009. ( I truly think that we could improve on this one. First off, why down to 620? Secondly, even people with credit scores of 570 or such can still have decent credit, under FHA's credit guidelines. I would think 600 would be a good place to start. And I will share some of the facts with charts in another post in the next several days. These are from outside sources that aren't connected with HUD & FHA.

FHA Loan changes for 2008 - 2009

Part 1 - Down Payment Assistance Programs

Part 2 - Upfront Mortgage Insurance Premiums

Part 3 - Down payment and Maximum Mortgage Requirements

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

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Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 09/27/2008 11:21 AM

Comments (20)

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fha loans, fha mortgages, down payment assistance programs, dpas, mortgages, mortgage changes, nehemiah programs, ameridream programs

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: FHA loan changes in the near future..... Part 1 of 3 - Down Payment Assistance Programs

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20 Comments on FHA loan changes in the near future..... Part 1 of 3 - Down Payment Assistance Programs

SEP

Good Job Jeff, keep the information rolling out. There is much that needs to be said.

Jeff,

Thanks for the update and the info ! It is interesting to keep track of all the changes and what is happening. Is rough out there !

Thank you Jeff for your continued fighting. I still need to send you the conference call from Mr. Syphax - did you get the short one last week?

Jeff it is really getting hard to keep up with all the new mortgage programs that are coming out. It is excellent information for you to be covering.

Jeff- This looks to be another great series of posts. The amount of changes can be overwhelming for most; you do a great job of breaking everything down. In your post, you did mean October 1st 2008 right? Not 2009: it's obivious if you read the entire post.....

Hi Jeff - thanks for keeping us updated on these constantly evolving changes, and many thanks to you for going to DC to keep up the fight. I hope those things really are just temporarily banned and not flat out discontinued.

Ann

With the bailout absorbing so much attention I have a feeling the DAP issue may be pushed aside. To add momentum to the housing market I think it should be reinstated with new guidelines asap but doubt it will be anytime soon.

Michael Shotnik

denver1stmortgage.com

FRED....... thanks and thanks for stopping by...

CHRISTOPHER...... I have never seen this many changes in 16 years, especially for FHA mortgages. Yes, it keeps things interesting.

KEN...... my pleasure... and yes, I was on the conference call this past week, when Scott talked for about 10 minutes and that was about it. There really wasn't anything new with this new one. thanks

BILL...... in my opinion, it's not as hard and the new changes for January 1st, 2009 in regards to the upfront mortgage insurance, it will make it easier again. There won't be a chart to keep track of it all, which will make it easier. But yes, there is a lot to keep up with at times.

MATT..... thanks and thanks for the compliments. And yes, I did mean 2008 and changed it. Thanks for the heads up.

Jeff, another very informative post - thanks much. Anything that Mr. Barney Franks has his hands in from now on I will be weary of.

Jeff, I am hopeful something reasonable will be worked out with DP assistance programs, the credit scores seem like a good way to start.

Jeff, thanks for the link!

Hi Jeff- It is all kind of confusing to me- that is why I let lenders talk to my buyers! It just isn't something I can comfortably address!

Oh, and by the way, consider this another reminder for the Heart walk donation you talked about!!

SEP

Jeff,

Thanks for the post. I was hoping that DPA would be rescued before the October 1, 2008 deadline. I guess the wall street fiasco has overshadowed DPA for now!

ANN...... it's my pleasure and it was not only fun, but interesting. It's actually good to be right in the middle of all of this. Hopefully this gets some priority and it moves forward. thanks for your support

MICHAEL...... I totally agree with you, which is a shame. Hence why I think it will be the end of this year. The one good thing is that Scott Syphax is down in DC most of the time and meets with some members of the Senate & Congress almost every day. So he is going to be one of the main reasons for this, besides the 100's of thousands of letters from the rest of us.

TIM & PAM....... thanks for the compliment. But why weary with anything the Barney Frank handles? He is one of the main supporters behind the DPA's right now. He has been pushing this amongst his peers. Just curious...

MISSY....... I am very hopeful... and yes, the credit scores help. I will be sharing this in the next few days, because I actually have some charts. But I wish they would dip down a little, to around 600. It still comes down to a qualified client..

PAT....... my pleasure and thanks for the support and for that post. I am going to do another very shortly with you, Brian, and I... thanks

CAROL........ it shouldn't be that confusing right now... but yes, listen to those loan officers that you trust. And no, I didn't forget. thanks

WILLIAM........ I think many of us were hoping for that. And I do have a very good feeling from all the reports that I have been receiving that it will be done.... but the question is when now. thanks

Thank you for your continued work for down payment assistance programs. I am hoping they are reinstated on some level in the near future.

I'm waiting for the new legs to this. I know that this is int the blender right now. Let's see what comes out as a result....

OCT

I saw a news clip recently. It was the asst director of the FHA saying that most of the foreclosures were a result of DPA. So why do we want to keep DPA? Isn't this part of what got us into this mess? Home ownership is NOT a right, it's a privaledge earned by saving for a down payment.

REBECCA....... thanks... but because of this bailout crap, this is on the back burner. But might not be so far in the distance as many think... it could be right around the corner, because Scott Syphax has been in DC meeting with Congress people and Senators left and right. thanks

LARRY....... I will be doing parts 2 and 3 in the next few days. thanks

JOE SASSER...... it's called politics at its best....would you believe me if I said I was the President of Irish Spring soap and said that the green part of the soap makes your toes blue 50% of the time?

My point... people can mislead with statements at any time. What you need to do is call out the Asset director of FHA .... "show me the proof" I have not seen one fact from HUD on their statements. In fact, that was how this case was thrown out of court the first time aroudn, because FHA/HUD could not back up their statements. But money follows money. HUD appealed to Congrss and Congress squashed this.... our very own gov't, many of whom have their hands in other pockets.

I will be doing a blog by this weekend giving you proof, from independant studies outside of FHA and HUD. Do you know that HUD wants to do their own DPA loans? Or try for 100% financing. But congress shot them down on the 100% financing...... now, do you think in all honesty that the stats would change if you did 100% financing? Please answer that seriously and think about my questions. Not trying to sound rude here.

To answer your question about the reason why we are in this mess is attributed highly to the DPA loans... that answer would be no, by a long shot. And I have actualy stats to prove this.

In regards to your statement.... "Home ownership is NOT a right, it's a privaledge earned by saving for a down payment."

That statement can be argued..... and it's not about saving a down payment... it's about being qualified and responsible. I have been doing this for 16 years and YTD, I know of 3 of my clients going into foreclosure.... 2 were 2nd homes... 1 was a primary residence.... out of the 3, 1 lost their job and 1 lost a family member that was helping to support them. The other.... got in over their head and with a new business that failed. They tried to keep the 2nd home which was her moms, but had to give it up... it was to late. Just a FYI....

OCT

Jeff - thank you for the information...I have noticed that you bring great information to ActiveRain about mortgages consistently. Thank you for your diligence at keeping the real estate industry updated.

OCT

The DPA programs should be allowed but in a very different form. I hope they get it figured out.

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