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Punctual Payment Program: A Worry Free FHA Loan Reimbursement

Punctual Payment Program: A Worry Free FHA Loan Reimbursement

Here is another option to FHA Alternatives to Down Payment Assistance programs that went away. I wrote a blog last week talking about the alternatives here

What is the Punctual Payment Program?

The Punctual Payment Program in a nutshell rewards home buyers in a reimbursement program for on-time payments.

The program is hosted by the Rainy Day Foundation that began in May 2006.

The website can be found here http://www.rainydayfoundation.org.

The fee for this program is $499.

How does the Punctual Payment Program work?

In a nutshell again for laymen terms. The program is designed to help strengthen "Loan Borrowing Potential", providing a "Worry Free Loan"

FHA loans now are capped at 97% Financing, which still require 3% down payment. If the client does not have the funds for down payment, FHA allows a gift from "Family or Friends"

Well most of the time when people ask for money from Family and Friends, they get a Big Fat "NO" or "Are you crazy" especially in this kind of market now.

Now, you can go up to your family/friends and say I will be enrolling in this re-imbursement program that will repay you back your money in 4-6 months. Family

The back bone of the program

Earn up to 3% contributed by the seller. Can be direct deposited into the borrower's account or the loaner's account.
The seller's contribution to be re-imbursed will go into an Escrow account maintained by the Rainy Day Foundation.
Seller or borrower can pay for the $499 fee (just like DPA's)

The Advantages of the program

Worry Free Loans
1 yr job loss coverage (benefit of $499 fee) - Event of loss job, coverage will be up to $1,800 per month for up to 6 months.
Pre-Purchase counseling
Post-Purchase Counseling
Missed Payment Protection - For as long as the borrower is enrolled the program will pay the loan servicer ANY MISSED payments. There is an outstanding ZERO first payment defaults ever!

Bottom Line is that this program provides an alternative way in finding assistance to Down Payment Problems, I hope you find this useful!

Posted by Justin Williams - Loan Officer on 10/29/2008 08:04 PM

Comments (15)

Down Payment Assistance in the Mortgage / Finance Channel

dpa, down payment assistance, fha, tips

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15 Comments on Punctual Payment Program: A Worry Free FHA Loan Reimbursement

OCT

2008

Justin - That is a great way to convince family member to lend money for the down payment.

OCT

2008

Justin, are you offering this program to your clients? What has been their response? Have you found any lenders willing to "recognize" the seller contribution?

Thanks for the info Justin ... I'd also like to hear some feadback on this. Most often my clients get gifts. But this is a decen idea ... add some personal experience if you can.

Karen - you don't know me but awesome seeing you here!!

HI JUSTIN!

You are just impressing more & more! You are so in-the-know! I may have to call on you for your services!!

Sounds like a good program. I agree, do you have experience with them yet?

NOV

2008

@ Jennifer - You betcha, thanks for stopping by!

@ Karen - I have just started offering this to my clients so far and is just another arsenal to my options. So far the response has been to find other ways of getting the down payment but clients were receptive to this. Every lender is different and some have not approved this program but alot has, check with Rainy Day.

@ Steve - Just like my response with Karen, I have just started using this, hopefully will become more popular soon, thanks for stopping by

@ Yvette - Why thank you for the awesome compliment! You made my day, likewise! have a great day!

@ Fred - Just opened up the flood gates, anything new to add to the mix will be a good thing :)

I just did a investigative article for www.LoanOfficerMagazine.com, interviewing bot the CEO of PPP - Rainy Day Foundation and step-by-step how it works.

Also interviewed a loan officer who is closing loans and how he is marketing it. I think loan officers need to be the FIRST in their area to offer it - and create a unique name - like the guys in the article.

Leslie Petersen, www.MortgageCurrentcy.com , a national FHA expert also quotes in the 4155 where it's acceptable as far as FHA is concerned.

@ Karen - Wow you did your homework, im impressed. thank you for sharing the links and information, I do think this program is valuable and I am hoping to take more advantage of this in the future.

NOV

2008

Justin, I would love to hear how you market it and your experience when you close a deal using this program. karen.

NOV

2008

you just keep pulling out more goodies from the bag! this is great info. as always, and I will file it away with all your other great info.

NOV

2008

As of January 2009, FHA purchase loans are requiriing an addition .5% for down payments to 96.5%LTV. I've heard of some SELLERS being set up to fund the additional .5% plus 3% after the loan closes using a simlar on time payment system...is this one Seller funded? Thanks, Susan

NOV

2008

Seller down payment contributions are NOT allowed and it's fraud if the above happens.

@ Loannetter - This is not to be confused with Seller Assisted Funds. This program is more of an essence to help borrowers achieve a worry free loan help.

@ Karen - Thanks for staying on top of things. I haven't closed a deal yet but I have marketing it by promoting the tag line a worry free loan either byt the $7,500 tax credit or the P.P.

JAN

Thanks for this information!! I am excited to be able to use this as not only a marketing tool, but an incentive for homebuyers to get into their homes. With the new changes in FHA, it has become increasingly difficult!

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