Punctual Payment Program: A Worry Free FHA Loan Reimbursement
Here is another option to FHA Alternatives to Down Payment Assistance programs that went away. I wrote a blog last week talking about the alternatives here
What is the Punctual Payment Program?
The Punctual Payment Program in a nutshell rewards home buyers in a reimbursement program for on-time payments.
The program is hosted by the Rainy Day Foundation that began in May 2006.
The website can be found here http://www.rainydayfoundation.org.
The fee for this program is $499.
How does the Punctual Payment Program work?
In a nutshell again for laymen terms. The program is designed to help strengthen "Loan Borrowing Potential", providing a "Worry Free Loan"
FHA loans now are capped at 97% Financing, which still require 3% down payment. If the client does not have the funds for down payment, FHA allows a gift from "Family or Friends"
Well most of the time when people ask for money from Family and Friends, they get a Big Fat "NO" or "Are you crazy" especially in this kind of market now.
Now, you can go up to your family/friends and say I will be enrolling in this re-imbursement program that will repay you back your money in 4-6 months.
The back bone of the program
- Earn up to 3% contributed by the seller. Can be direct deposited into the borrower's account or the loaner's account.
- The seller's contribution to be re-imbursed will go into an Escrow account maintained by the Rainy Day Foundation.
- Seller or borrower can pay for the $499 fee (just like DPA's)
The Advantages of the program
- Worry Free Loans
- 1 yr job loss coverage (benefit of $499 fee) - Event of loss job, coverage will be up to $1,800 per month for up to 6 months.
- Pre-Purchase counseling
- Post-Purchase Counseling
- Missed Payment Protection - For as long as the borrower is enrolled the program will pay the loan servicer ANY MISSED payments. There is an outstanding ZERO first payment defaults ever!
Bottom Line is that this program provides an alternative way in finding assistance to Down Payment Problems, I hope you find this useful!