It is coming to our attention that "DPA's" - Seller Funded Down-Payment Assistance programs could very well be "outlawed" by Congress. I am going to keep this blog both brief and for fellow Realtors others in the Real Estate community as well as the public because I know that there thousands of you out there feel quite strongly about the issue on both sides of the fence. Feel free to add to this blog everyone's "justification" for the existence or the eradication of these programs. We need to start a real dialogue - fast.
For the record, it is my understanding that the "high number of defaults and foreclosures" are "3 times as likely to occur" by people who used these programs 2,3 AND 4 YEARS AGO. Folks, a LOT has changed over the last year, esp. since August when both the Financial and Credit world literally imploded (according to and thanks to Mass Media). Lending standards have tightened considerably. It seems that FHA is basing it's own potential insolvency (conveniently at the same time that Freddie Mac and Fannie Mae need infusions of billions to survive) on a 2005 report of foreclosures. There are also, by the way, very responsible people in this country who haven't lost their homes and utilized the same programs like Ameridream and Nehemiah.
Which brings me to my own position and I would love to create a dialogue between all of us. Whether it was Speculators, Investors (both amateur and pro), historically low interest rates, Builders, greed created from cocktail stories of "instant equity" and that little sin called envy...whatever it was, the truth is that between 2000 and the middle of 2005 many, MANY cities, neighborhoods and homes throughout the country experienced, not just Appreciation (double-digit in some years) but a mass feeling and comfort of instant wealth. Though we all intuitively knew that "what comes up must come down", most of the rest of the world watched with "baited breath" just how high perceived values of properties would go. Seasoned Agents have seen it before, just not on the scale of this past phenomenon.
Yes, prices have come down...a lot in many of these same places. However, many people, good people, with good credit are still priced out of the market. Sometimes, the only way for people to get in a house (these rates won't last forever) is through the use of these same DPA programs. And so, you say, they should "stay in apartments, with relatives, etc., save money for a down payment". You say, "been there, done that". Perhaps so, but I'm not walking in any other set of shoes but my own, but I do know this...Every situation is different. I am a human being and I have seen my own set of struggles AND accomplishments. Everyone has a story. Many people (good people. intelligent people) have been enticed into all sorts of financial agreements and arrangements that they will be paying for for many years. The inventory of homes is extremely high in many of the places I am speaking of. But more buyers are finally getting off of the proverbial fence. And yet foreclosures still abound. We are in the business of helping people to buy and sell homes. If I were to address certain members of Congress - both in the Senate and the House, I would ask the following question, "Are you there to be part of the solution or part of the problem?"