The Death Of The Down Payment Assistance Program??

I agree with Kathy Hyatt and those that believe if someone cannot save 3% for a down payment they are already over their head financially and not capable of owning a home YET.    People need to realize that home ownership is not an entitlement right but something to be earned.

I agree with Kathy Hyatt and those that believe if someone cannot save 3% for a down payment they are already over their head financially and not capable of owning a home YET.    People need to realize that home ownership is not an entitlement right but something to be earned.

The part that is amazing to me is how quickly we are jumping from one side to the other.  Whatever happened to intermediary steps and seeing if they work?  Nehemiah has been around for 10 years or so, and historically has been a great program that helps good people get into good loans that can't save the down payment.  (And I understand the comments of if you can't save 3% you shouldn't be in a home, but really, here in AZ where the average home price is in the $200,000-ish range for something near the city core, that's a lot different than other parts of the country where you're able to buy homes for $75,000-$100,000.  Assuming people are able to save $200 per month over and above their budgeted expenses, that's 30 months of savings--2 and 1/2 years more of renting instead of homeownership.)

For instance, why not require people who utilize Nehemiah/Ameridream/DPA to attend a HUD counseling seminar where the counselor goes over a budget with them.  Why not create an automatic withdrawal plan where the rate and payment are lower if the payment is withdrawn right from their checking account each month?  Why not require two months reserves over a 60 day period (that way it can be a gift, but a long term gift instead of just dumping it in there to qualify for the loan). 

Once these or any other incremental ideas are implemented, then we need to WAIT to see what the results are.  You can't take a month of time and create public policy based on the results from that month alone.  I think the market has done a decent job of recognizing changes and has implemented policies based on each lenders experience.  Let the market continue to work with government oversight, not the other way around. 

I sent my objections in to my 2 senators.  Democrat Bill Nelson to paraphrase said that there is a higher default rate for people who buy using these programs, so they need to be ended.  He just doesn't get it. The low income neighborhoods will end up either being completely blighted or owned by a bunch of landlords.

I will be honest with you. I am against DPAs. I am against 100% financing.

I don't believe it is financially smart or responsible for anyone to buy a home when they can't even save a small down payment. I don't care if you make it 1%. They should have to learn how to save, budget and buy WITHIN THEIR price range.

The current fiasco was caused by people buying too much house. They never learned debt management, they were trying to keep up with the Joneses and not enough thought was put into them handling their finances down the road.

Does this hurt some agents and brokers, yes, maybe, but we can adjust.

It was irresponsible of us to give these people fish and not teach them how to fish for themselves. Now we all suffer because of it.

Yeah, well, go tell that to a Vet.   I'm amazed at what I'm reading here.  Absolutely amazed.  You actually think that this 'crisis' was caused by people who didn't have money down?  Wow.

Aaron,

Efforts to abolish seller funded down payment assistance programs has been ongoing for many years.  It appears that it is very close to becoming a reality now.

While I have not been active with these seller funded programs I have been very active in State Mortgage Revenue Bond programs as well as local city and county SHIP (State Housing Initatives Partnership) which are local municipality programs. While Florida is quite active in this area other States may not be.  Market conditions and constraints are starting to impact these.  LO's wanting to participate in this aspect of service should look into the State and Local programs.

Cyd, my ex husband is a Vet, he just bought his 3rd house. He started out as a Peon and he's now like an E-9. He's been in the military for 20 years. My uncles were vets and all homeowners, my grandfathers were vets, all homeowners.

Any vet that isn't a homeowner is not doing something right. Not getting answers where answers exist.

Aaron, people do have little money. No one saves anymore. You have people who make $30,000 a year driving $30,000 cars.

People have to come back to REALITY.

Our parents and grandparents didn't have everything they have now in their 20s. But now 20 year olds expect to have it all right away.

You have people struggling to pay their debts and their kids all have cell phones which to them are a NECESSITY? How did we all survive our childhoods with no cell phones?

My cousin on welfare buys her kids the latest and greatest Playstation every time they come out. In my household growing up we didn't even have a VCR until I was almost 14 years old and my mom was never on welfare!

It's about financial responsibility to me and what is a need versus a want. It's about realism. Having realistic expectations.

Everything is labeled a disease these days so let's call this the Financial disease.

Steve Harless has a great blog regarding this.  Log on and DO SOMETHING *********EVERYONE WHO IS IN FAVOR OF DOWN PAYMENT ASSISTANCE-WE NEED TO MAKE A DIFFERENCE AND ASAP.

If this isn't a featured post, it as well as Steve Harless's blog about this needs to be front page each day on here until that bill goes into effect so we can try to get something done.

Aaron, I am curious as to what people think now. I have signed every petition I could when people were fighting this and still continuing to try and fix this mistake...so many thought this was a scam that should be done away with.....but now the feed back that I often get is "Isn't there any assistance?" Grants & Bonds are great (when the monies are available) but that doesn't make things better or help out the majority of Qualified borrowers. Qualified in the sense that they can afford the monthly mortgage payment, have a little saved up for the new adjustment of homeownership and still make enough to pay all other bills the just dont havebut the amount needed for the down payment...I think we are and will continue to see "quick fixes" that are a huge mistake and cause more damage in the future unless they just stop! Stop passing things they dont read or dont understand!!!