Please help try to save the Down Payment Assistance Programs!

By
Mortgage and Lending with Your IRA guy!

Going away OCTOBER 1st.......

I think it's going away this time-which will deal yet another blow to people who can't afford a down payment (especially minority lending).  If FHA comes out with a 100% loan, it may be fine but, in this environment I think bringing out this kind of product now may be too bad of press.
What people don't understand is, the DAP's are used with FHA loans but are "full doc" loans just with no money down-they aren't the reason the market tanked-the economy/gas prices along with the reduced documentation programs that were made available is the main reason for the market meltdown.
It just stinks that, like in a lot of cases, the people that have the power to make major decisions (like to cut the DAP programs) aren't necessarily the people who know the ins and outs and what the best soutions for the problems are.

There are so few 100% or no money down type programs available now, the markets have really changed over the past year or so.  Now I agree that there were a lot of "silly' loan programs made available to everyone but this isn't one of them.  This isn't a stated, reduced doc, or no doc type of program, it is used with an FHA loan so it is a fully underwritten product-meaning the buyers fully qualify for the loan amount-they just don't have the funds for a down payment.

www.getdownpayment.com

Please, no matter if you are a lender, realtor, buyer, seller, etc...... take a minute to go to this website click on take action and help us voice continued support for this program before it goes away for good.

Thanks everyone!

Michael

Comments (2)

Ken Graczak
LoanDepot - NMLS#174457 - Equal Housing Lender - Woodbury, MN
Loan Consultant - Minneapolis / St. Paul

FHA loans will also have risk based pricing and the minimume down payment will go up to 3.5%.  This will happen October 1st also because of the bill.

So not only are they taking away the programs like Nehemiah, but they are going to require more down.   I don't understand how this bill will help more buyers get into homes.  Please coment if you know so I can understand this a little better. 

Thanks...

Jul 30, 2008 07:27 AM
Michael Schindler
Your IRA guy! - Galesville, WI

FHA Risk pricing is already in effect and it's pretty minimal to be honest with you.  I haven't seen anything about the minimum down payment going to 3.5% though?

Apparently studies have shown that the more you put down on a house, the more you will not be so eager to just walk away from it.

At this point, they aren't sure what program tweaks they should do.  They want to stop the bleeding of foreclosures hence trying to get rid of the Down Payment Programs and their usage as 100% financing tools but on the other hand, with all of the other guidelines changing in other program areas, they will be making it harder and harder for people to buy homes.  This will make banks sit on foreclosures longer and lose more money-effectively dragging out this nasty market longer than anyone wants.

The goal from what I see is to do what looks politically correct (i.e. take away a 100% option) but make underwriting guidelines tougher yet still try to get people into homes to get rid of all of the vacancies.

 

Jul 31, 2008 02:52 AM