It is now almost certain that FHA will no longer be able to accept the down payment assistance programs like Genesis or Nehemiah to take the loan from 97% to 100%. The House and the Senate negotiated this yesterday and they agreed to eliminate it although it still has to be voted on, most likely just a formality though that it will pass. The president of Nehemiah told all their employees yesterday they are expecting to shut down the company.
What does this mean to us? Buyers will soon need 3% down, that will be the lowest down payment available. (Although VA is still a 100% loan) They will still be able to get a gift from family for the 3% we believe. The seller will still be able to pay their closing costs. It will be more important than ever that we prequalify people and make sure they have the money they will need to buy.
It just so happens that I am working on a transaction at this very moment (representing the seller) where the buyer is purchasing under the down-payment Assistance Program. With all the lender changes taking place at a moments notice that can kill a deal in progress, this got my heart to beating a little fast so I called a lender friend of mine who tells me the program will dissolve September 30 so I should be fine with a Sept 8 close. This is all news to me as of today with the down-payment assistance program so I don't have any more information at hand, but I'll post whatever more I find out.
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