You will probably be receiving requests shortly and asked to support the reinstatement of Seller Down Payment Assistance Programs ( DPA's ). These programs are generally stimulants to the housing market as they allow Borrowers to enter the Real Estate market without having the FHA required 3.5% mandatory down payment.
Quite often they are used to finance the entry level homes we must sell in order for the existing Homeowner to make his/her move up. In today's environment removing one more Foreclosure from the market place. As each Foreclosure is sold and closes Escrow we approach a more stable market. The overabundance of existing homes on the market is the largest contributor to declining home prices.
Why H.U.D. would increase down payment requirements from 3% to 3.5% in the worst housing market is beyond me. And then follow this up with removing the DPA's makes no sense to me The market was seeing a real increase of sales towards the end of 08. These sales stopped as soon as the changes went into effect with most lenders 11/30/08. Some wholesalers funded until early January if the loan had a FHA case number and was previously locked.
FHA loans using DPA were not responsible for the Sub Prime crisis and should not be the sacrificial lamb or scapegoat.
With interest rates as low as they are today many young couples could buy their first home and have a monthly payment equaling their existing rent.
Lets all put in 10 minutes when asked to fill out the form and transmit to out Government Officials.
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