Gift programs appear safe!

By
Mortgage and Lending with Your IRA guy!

Below is a letter we received today from Scott Syphax , President & CEO Nehemiah Corporation of America regarding the court battle over the various gift programs that many of us utilize.  These programs assist our clients in getting into a home by providing a non-profit gift to the buyer that is funded to the non-profit by the seller.  Because this is a gift program, it doesn't fall under seller concessions requirements-so you could still have the seller pay closing costs as well as give a gift for the down payment!

Right now, I believe the utilization of the non-profit gift program coupled with an FHA loan is one of the only ways left to get a client into a home with no money down! (Certainly with the best pricing)

Also, FHA is NOT subject to the soft markets 5% reduction in loan to value that other loan programs are running into.

If you aren't using this method (FHA and a gift program), you may be missing out on the new mortgage market.  I just heard a rumor today that it is believed that, in 2008, 40% of 1st mortgages will be funded using FHA loans-purchase and refi's!

Big News......FHA loan limits for the 11 county Minneapolis metro area has been increased to $365k up from $276,683!!!

Lastly, FHA is a lot easier than a lot of realtor's may remember.  Make sure you are up to speed on the FHA programs-and work with an experienced FHA loan officer!

Michael Schindler

 

Dear Colleague,

I am pleased to announce that Nehemiah was victorious in its litigation against HUD!

Judge Lawrence K. Karlton of the United States District Court for the Eastern District of California upheld Nehemiah's motion for summary judgment. The Court Clerk's Office is directed to enter judgment and close the case.

To be clear, the U.S. Department of Housing and Urban Development's (HUD) rule to ban private downpayment assistance as proposed in the "Standards for Mortgagor's Investment in Mortgaged Property" regulation published October 1, 2007, is permanently set aside.

We are thrilled with the Court's decision to support low-to-moderate income families across the country by ruling against HUD's attempt to ban private downpayment assistance. This is a major and conclusive judgment, leaving no uncertainty that downpayment assistance is a life line to the families that Nehemiah serves. It is heartening to see that the Court's arguments echo our sentiments and concerns. This decision preserves access and supports the use of sensible and reasonable approaches to homeownership for millions of working class families. It is a privilege to continue providing a helping hand to America's underserved families by building both safer communities and financial strength through homeownership. As we have said before, we look forward to working with HUD to support deserving families across the country.

Since May 2007, Nehemiah has led the fight against this controversial rule. Since it was announced, there has been confusion throughout the industry regarding the potential impact of this rule. As the DPA industry leader, Nehemiah took seriously our responsibility to provide you with timely, accurate and responsible information about the events and activities surrounding this issue.

We took action by educating influential people and organizations regarding the truth about downpayment assistance. We asked for our homebuyers and industry partners to help us by voicing their support and the response has been overwhelming. I want to thank each of you for your letters, phone calls and spoken support of Nehemiah throughout this unfortunate situation. Your support has helped raise awareness in Washington D.C. which has increased the dialogue regarding DPA regulation though legislation. We hope to see some positive congressional developments aimed preserving the option of private downpayment assistance for homebuyers. Currently, the Senate is contemplating FHA Reform legislation that will determine the fate of private downpayment assistance programs. Please help us one more time by contacting your Senatorsto convey your support for downpayment assistance; a very important vote is expected in the next few weeks.

As a reminder, we provide a section on our website called Regulatory Updateswhere we detail significant issues relating to DPA regulatory and legislative events. Check back for new postings or sign-up to have accurate and timely information delivered to you.

On behalf of the entire Nehemiah team, we look forward to providing you with the same unmatched quality you have come to expect from us for years to come.

Sincerely,

Scott Syphax

President & CEO

Nehemiah Corporation of America

Comments (2)

Brian Luce
HomeStarr Realty Inc. - New Hope, PA
Associate Broker
For the longest time here in PA it's been virtually impossible to even get a seller to consider any type of offer with a Nehemiah type of "gift" involved.  I'm curious to see if that changes given the current market here and in other areas.  Thanks for posting.
Mar 07, 2008 07:03 AM
David Soto - Illinois Home Loans & Mortgages
Illinois Home Loans & Mortgage Refinance - Chicago, IL
great news, i am glad you pointed out the gift and fha combine make an excellant way to save clients from not being able to get their home
Mar 07, 2008 07:03 AM