At least in Florida where I live, and I would believe that it is the same in most other states low and moderate income buyers will still have many options for downpayment assistance from local, county, and state government programs.
BUT WHAT ABOUT THE GENERAL WORKFORCE BUYERS?
What I'm taking about are the individuals and families who will have income which exceeds the limits for many/most county/state downpayment assistance programs. Previously these buyers would have the opportunity to utilize a DPA program through a non profit organization. Soon that may no longer be the case. In their infinite wisdom HUD has come down hard on these programs.
Let me stress two points;
First, you are taking this option away from the middle class and the timing couldn't be worse. I have to believe that there had to be other options.
Second, in many states the program could be used and still stay within the FHA guideline that a seller not contribute more than 6% of the sales price toward the buyers cost. Once again I'm in Florida, and we just closed a loan utilizing Ameridream and we stayed within that limit. To be honest the buyer did need to bring $255 to closing.
HUD'S Rational;
We are increasing the price of the home to cover the additional costs.
Pleeeeeeeeeeeeeeeeeeease, sellers have been increasing the price to cover the allowable 6% concession as long as I've been doing FHA loans. Who do they think their kidding. Hasn't HUD ever heard of a sellers NET statement.
The fact is that any low/no downpayment program in a normal and/or declining market will put the buyers in a position that they must stay put in the house for awhile to develop equity. These buyers are looking to own a home for themselves and/or their families. They're not real estate investors. So it's okay.
The non profits are not dead yet!
Nehemiah is good till the end of March 2008, and both Nehemiah and Ameridream have filed suit against HUD. An injunction would be nice and a decision favoring the non profits is entirely possible
You know what Yogi would say:
It ain't over till it's over.
In his own way, that olde Yogi was a wise man.
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