Punctual Payment Program: A Worry Free FHA Loan Reimbursement

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Mortgage and Lending with Independent

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.Family

 

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!

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Ambassador
1,648,338
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Justin - That is a great way to convince family member to lend money for the down payment.

Oct 29, 2008 03:12 PM #1
Rainmaker
107,107
Karen Deis
ApartmentToolKit.com - Minneapolis, MN
When In-house training is not enough!

Justin, are you offering this program to your clients?  What has been their response?  Have you found any lenders willing to "recognize" the seller contribution? 

Oct 30, 2008 12:57 AM #2
Rainer
295,504
Stephen Kappre
KW Hometown - Mantua, NJ
Helping You Home

Thanks for the info Justin ... I'd also like to hear some feadback on this.  Most often my clients get gifts.  But this is a decen idea ... add some personal experience if you can. 

Karen - you don't know me but awesome seeing you here!!

Oct 30, 2008 02:34 AM #3
Rainmaker
96,150
Yvette Smith
LONG & FOSTER - Williamsburg, VA
Realtor In Williamsburg VA, Homes for Sale

HI JUSTIN!

You are just impressing more & more!  You are so in-the-know!  I may have to call on you for your services!!

Oct 30, 2008 03:34 AM #4
Rainer
170,315
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Sounds like a good program. I agree, do you have experience with them yet?

Oct 30, 2008 05:43 AM #5
Rainer
82,653
Justin Williams
Independent - Virginia Beach, VA
Loan Officer

@ Jennifer - You betcha, thanks for stopping by!

@ Karen - I have just started offering this to my clients so far and is just another arsenal to my options. So far the response has been to find other ways of getting the down payment but clients were receptive to this. Every lender is different and some have not approved this program but alot has, check with Rainy Day.

@ Steve - Just like my response with Karen, I have just started using this, hopefully will become more popular soon, thanks for stopping by

@ Yvette - Why thank you for the awesome compliment! You made my day, likewise!  have a great day!

@ Fred - Just opened up the flood gates, anything new to add to the mix will be a good thing :)

Nov 07, 2008 12:04 AM #6
Rainmaker
107,107
Karen Deis
ApartmentToolKit.com - Minneapolis, MN
When In-house training is not enough!

I just did a investigative article for www.LoanOfficerMagazine.com, interviewing bot the CEO of PPP - Rainy Day Foundation and step-by-step how it works.

Also interviewed a loan officer who is closing loans and how he is marketing it.  I think loan officers need to be the FIRST in their area to offer it - and create a unique name - like the guys in the article. 

Leslie Petersen, www.MortgageCurrentcy.com , a national FHA expert also quotes in the 4155 where it's acceptable as far as FHA is concerned. 

Nov 07, 2008 12:21 AM #7
Rainer
82,653
Justin Williams
Independent - Virginia Beach, VA
Loan Officer

@ Karen - Wow you did your homework, im impressed.  thank you for sharing the links and information, I do think this program is valuable and I am hoping to take more advantage of this in the future.

Nov 07, 2008 09:01 AM #8
Rainmaker
107,107
Karen Deis
ApartmentToolKit.com - Minneapolis, MN
When In-house training is not enough!

Justin, I would love to hear how  you market it and your experience when you close a deal using this program. karen.

Nov 10, 2008 12:42 AM #9
Rainer
6,975
Military Relocation Specialists
Long and Foster Realtors - Virginia Beach, VA

you just keep pulling out more goodies from the bag!   this is great info. as always, and I will file it away with all your other great info. 

Nov 13, 2008 08:04 AM #10
Rainmaker
66,965
Susan Templeton
Bellingham, WA

As of January 2009, FHA purchase loans are requiriing an addition .5% for down payments to 96.5%LTV. I've heard of some SELLERS being set up to fund the additional .5% plus 3% after the loan closes using a simlar on time payment system...is this one Seller funded? Thanks, Susan 

Nov 14, 2008 03:43 PM #11
Rainmaker
107,107
Karen Deis
ApartmentToolKit.com - Minneapolis, MN
When In-house training is not enough!

Seller down payment contributions are NOT allowed and it's fraud if the above happens. 

Nov 17, 2008 02:05 AM #12
Rainer
82,653
Justin Williams
Independent - Virginia Beach, VA
Loan Officer

@ Loannetter - This is not to be confused with Seller Assisted Funds.  This program is more of an essence to help borrowers achieve a worry free loan help.

@ Karen - Thanks for staying on top of things.  I haven't closed a deal yet but I have marketing it by promoting the tag line a worry free loan either byt the $7,500 tax credit or the P.P.

Nov 17, 2008 02:21 AM #13
Rainer
38,518
Wanda Promes
Sioux Falls, SD
Mortgage Loan Originator

Thanks for this information!!  I am excited to be able to use this as not only a marketing tool, but an incentive for homebuyers to get into their homes.  With the new changes in FHA, it has become increasingly difficult!

Jan 02, 2009 02:07 AM #14
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Justin Williams

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