More Insight on End of Down Payment Assistance
Possibly due to the housing relief bill signed into law in Washington, D.C. last week, the phones in real estate offices have begun to ring again. This will probably be an artificial jump in housing sales, but for now every little bit helps. One component of the bill will eliminate the down payment assistance programs currently at the disposal of buyers who need help getting into a new home. According to the Ellis Team of RE/Max,
Buyers who wish to buy with no money down had better hurry, because the new Housing Bill signed recently essentially eliminates down payment assistance from the seller on all FHA loans, and Congress added in the bill a provision that the new minimum down payment will now be 3.5%, up from the previous 3%. Financing is getting increasingly harder to get, and underwriting guidelines are changing daily.
As a result, buyers I’ve been working with for some time have found a renewed urgency and are kicking their home search into a higher gear in order to buy prior to October 1, 2008 - when the programs are expected to end.
However, the FHA Loan Advice site doesn’t believe the programs are down for the count,
For both political and practical reasons, many in Congress agree that down payment assistance programs should be continued. Although the portion of the new law banning down payment assistance has not yet taken effect, HR6694, the “FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008” was introduced on July 31. All the non-profit organizations which have been facilitating the program are already out beating the bushes to round up support. If you would like to help, the Nehemiah Corporation has a website set up to help you find out how. You can find it by clicking here.
I’m hoping the members of Congress who are supporting legislation to continue the programs will be successful.
Meanwhile, I found an extraordinary site called Calculated Risk that is being added to my list of *must-reads* if you like reading about investing, finances, and other economic information.
