End of Down Payment Assistance Oct. 1st - Actual text

By
Real Estate Agent with Greenridge Realty Oakmont

This is from the Government Printing Office, (GPO)

H3221 Bill text in SEC. 2113 pertaining to "Down Payment Assistance" as passed by the House & Senate

[See Sec. (C) PROHIBITED SOURCES]

SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF

SELLER-FUNDED DOWN PAYMENT ASSISTANCE.

 Paragraph (9) of section 203(b) of the National Housing Act

(12 U.S.C. 1709(b)(9)) is amended to read as follows:

‘‘(9) CASH INVESTMENT REQUIREMENT.-

‘‘(A) IN GENERAL.-A mortgage insured under this section

shall be executed by a mortgagor who shall have

paid, in cash or its equivalent, on account of the property

an amount equal to not less than 3.5 percent of the

appraised value of the property or such larger amount

as the Secretary may determine.

‘‘(B) FAMILY MEMBERS.-For purposes of this paragraph,

the Secretary shall consider as cash or its equivalent

any amounts borrowed from a family member (as such

term is defined in section 201), subject only to the requirements

that, in any case in which the repayment of such

borrowed amounts is secured by a lien against the property,

that-

‘‘(i) such lien shall be subordinate to the mortgage;

and

‘‘(ii) the sum of the principal obligation of the

mortgage and the obligation secured by such lien may

not exceed 100 percent of the appraised value of the

property plus any initial service charges, appraisal,

inspection, and other fees in connection with the mortgage.

‘‘(C) PROHIBITED SOURCES.-In no case shall the funds

required by subparagraph (A) consist, in whole or in part,

of funds provided by any of the following parties before,

during, or after closing of the property sale:

‘‘(i) The seller or any other person or entity that

financially benefits from the transaction.

‘‘(ii) Any third party or entity that is reimbursed,

directly or indirectly, by any of the parties described

in clause (i).

This subparagraph shall apply only to mortgages for which

the mortgagee has issued credit approval for the borrower

on or after October 1, 2008.''.

 For full bill text as passed by the House & Senate, you can access it here:  http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h3221enr.txt.pdf

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Rainmaker
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Rhonda Burgess
Southern Living Realty Partners - Smyrna, TN
Moving to Nashville TN Real Estate Specialist

This is so sad.  I know they think they are supposedly "helping" the mortgage meltdown but they are just adding to the crisis.  The first-time buyer pool will be markedly diminished as these people will have to come up with 3.5% down.

Jul 29, 2008 09:06 AM #1
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Rainmaker
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Lynn Afton

REALTOR® Near Big Rapids, MI, Mecosta County
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