Special offer

FHA? Downpayment Assistance?... What's That?

Real Estate Agent with Coldwell Banker Hobin Realty, LLC - Hampton & Rye, NH, USA

When I first got into real estate, I was working for my parents in Dayton, Ohio.  Dayton had (and still has) a very affordable real estate market.  It was very common to see most buyers purchasing using FHA financing or other government loans.

When I moved to the Seacoast of New Hampshire back in 1999, I found that FHA and VA financing was hardly ever used.  In fact, I was working with a young couple who were TRYING to buy a house VA, but their offers were continuously turned down just because of their type of financing.  They went back to Tennessee.

Anyway.... that was then, THIS IS NOW!  We are no longer is a sellers market, so sellers need to do whatever they can to appeal to buyers and we need to do all that we can to make homes available to as many buyers as possible.

In April, it was announced that there would be no more 100% conventional financing available due to PMI issues. (You can still get an 80/20; basically a first & a second mortgage to start ~ but who wants to do that?)

RE-Enter: Nehemiah and FHA!  It's like an old answer to a new problem! 

I was cruising around in the Rain and saw somone comment about the lack of 100% financing and we had just closed one, so I wondered how that could be!  I contacted the loan rep that closed our 100% and he confirmed it.  He says: "Yeah, you guys got in right under the wire on that one".  He then tells me about Nehemiah and how it works with FHA.  I think, WOW, this is Great!  I call my mom (who's still selling in Ohio) and she was like: "Oh Kath, that's old news!".  I've been doing that for years!  (Boy did I feel dumb!)

Well, I guess it took a while for us to hear about it up here in New Hampshire because we have been so used to these conventional loans that we forgot all about FHA, VA and other types of loan programs. 

Anyway... I checked out the Nehemiah site, took the FREE Training and now we are all set to start offering this to folks.

If you don't already know... Here's the scoop:

Nehemiah is a non-profit organization that is approved to give gift monies up to 6% of the purchase price.  FHA works well with Nehemiah because their program accept gift monies.  Traditionally, these funds were from parents or other relatives, but now the seller can contribute up to 6% to Nehemiah on behalf of their buyer.  This is not a loan, it's a gift!

Buyers don't have to be first timers, and the FHA loan limits are high enough to cover most of the market.  Currently, Rockingham and Strafford County, NH is $523,750 for single family homes!

In this market, many sellers are giving up more than 6% of asking price just to get a sale.  If they can donate this to Nehemiah on behalf of their buyers, they will make their property available to more buyers, thus making it sell faster and for closer to asking price! BTW... I asked Nehemiah if the donation is tax deductable and they deferred that question to an accountant, so just check with yours!

Agents can get free training, free sign riders, advertising materials and can put their listings that are participating in the program on the Nehemiah site for FREE.  More exposure for our sellers!

What about those homes that need work?  Well, try the FHA 203K program!  Nehemiah works with that too!

IT'S A WIN, WIN, WIN....  

Buyers WIN with a down payment gift

Sellers WIN with a larger pool of buyers and probably a quicker sale and higher net


Agents / Brokers WIN with more sales and probably referrals, repeat customers and friends made by helping others to find this WONDERFUL PROGRAM!


If you are looking to buy or sell in the Seacoast of New Hampshire, give us a call!  We would love to help you!






Christopher Bonta
The Bean Group - Londonderry, NH
Realtor, Integrity and Honesty

Great post, we can all use any help qualifying our buyers.

May 10, 2008 02:01 AM
The Bartley Group SouthEast MN Real Estate
Coldwell Banker Home Connection - Owatonna, MN

If the sellers are willing to contribute then it is a gift.  Unfortunately many times the purchase price is raised up by the gift amount so the buyers are in fact paying the fee.  It does allow them to qualify for a FHA loan though.

May 10, 2008 03:18 AM
Katherine Anderson
Coldwell Banker Hobin Realty, LLC - Hampton & Rye, NH, USA - Exeter, NH
Managing Broker

Christopher: Thanks for the comment.  Quite amazed that this is very rarely used in our area.

Bartley Group: Raising the price is not allowed.  I know that people have done that in the past, but it's not allowed.  This is something that should be discussed with sellers at listing. This program requires full disclosure.  I am quite certain that lenders and their appraisers are looking at these very closely in light of the mortgage crisis.  Thanks for your comment. 

May 10, 2008 03:43 AM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

I haven't had a chance to use the 203K program yet, but I do have a few buyers looking in to the program for some homes they could buy in a short sale.

May 20, 2008 09:18 PM
Katherine Anderson
Coldwell Banker Hobin Realty, LLC - Hampton & Rye, NH, USA - Exeter, NH
Managing Broker

Todd: The Nehamiah program doesn't work on short sales.  It's not allowed because the seller can't gift money that they don't have.  The 203K is just another one of FHA's programs, so if your short sale buyers just need a way to fix up a property, FHA203K is a great program.  They can also buy multi-family properties (as long as they plan to live in one of the units).

May 21, 2008 01:41 AM