Beazer Homes USA, Inc. (NYSE: BZH), one of the country's top-10 home builders, is promoting alternative solutions for home shoppers who are concerned about recent changes in mortgage lending laws that make it more difficult for credit-worthy but cash-strapped consumers to become homebuyers.
Called Doors to Down Payment, Beazer launched a new online tool at Beazer.com to inform homebuyers that the Oct. 1 demise of seller-funded down payment assistance should not be a deterrent for those with good credit and sufficient earnest money.
Listed under the "Finance Your Home" section of Beazer's website, the content explores various ways to build a down payment fund, including participating in a new builder-sponsored savings plan or asking an employer to contribute to closing costs as part of an employer assistance program.
"There have been a lot of changes recently resulting in some confusion among the public at large and even those within the industry," said Daniel Gregory, General Sales Manager, Jacksonville Division for Beazer Homes. "When it comes to a mortgage down payment, we want prospective homebuyers to understand all of their options." Gregory cited results of a recent Beazer survey in which 45 percent of all respondents said not having enough for a down payment was their biggest obstacle in buying a new home.
While there is no standard down payment requirement on home loans, conventional mortgages typically demand 20 percent to secure the best interest rate. For those who qualify for an FHA loan, the minimum down payment has gone to 3.5 percent (up .5 percent) as of Oct. 1. This means that for a $220,000 home, a prospective buyer now will need a $7,700 down payment on an FHA loan, an increase of $1,100 over the previous minimum requirement.
One of the unique down payment options Beazer is highlighting is its Buy & Save plan that mimics the traditional layaway in that the buyer pays installments into a "savings" account until the home is completed and the down payment satisfied.
"Beazer's Buy & Save plan keeps the new homeowner on a steady savings track while they are watching their home being built," said Gregory. "It also serves as a motivational timeline. From the very beginning when the foundation is poured to the end when the last fixture is installed, there is a sense of pride and ownership in their new home."
For those looking to increase their down payment fund, following are some additional options to consider, all of which can be used separately or combined:
Gift funds: An outright gift of cash from a relative, employer, labor union, charitable organization, governmental agency or public entity.
Secondary financing by family members: A portion of the down payment and/or closing costs can be in the form of a secured loan from a family member. This cannot exceed a combined loan-to-value of 100 percent of the sales price or appraised value, whichever is lower.
Sale of personal property: Sales proceeds from cars, recreational vehicles, stamps, coins, baseball card collections, etc.
Employer assistance plans: As an incentive, some employers will pay the employee's closing costs, mortgage insurance premium or any portion of the cash investment.
Savings bonds: Government issued bonds that are valued at original purchase price or the current price.
Tax Credit: As part of a new housing bill, the government is offering up to a $7,500 tax credit for first-time homebuyers or those who have not owned a home in the past three years.
IRAs, Thrift Savings Plans, 401(k) plans and Keogh Accounts: Typically 60 percent of value can be used, unless evidence can be provided that a higher percentage may be withdrawn after Federal income tax and withdrawal penalties.
Beazer's Doors to Down Payment initiative represents the second web-based educational tool the builder has launched as a result of the passage of the Housing and Economic Recovery Act of 2008. In August, Beazer hosted a free video webinar to help prospective first-time homebuyers learn about the benefits of the temporary tax credit introduced as part of the bill.
Beazer Homes USA, Inc., headquartered in Atlanta, is one of the country's ten largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH."
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For more information, contact
Daniel Gregory, General Sales Manger Beazer Homes-Jacksonville, 904-292-9440
Brooke Keysor-Ddge, SE Regional Marketing Specialist Beazer Homes 407-339-4114
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