Jul 30, 2008

Down Payment Assistance Programs - ACT BY OCT 1st

This news IS important.

Over the last year, 17% of all home purchases by first time buyers were made with down payment assistance programs.

The most noteworthy is the "Nehemiah" program. That program has been in the press for months, and the industry has been buzzing about it's rumored end. It looks like that is happening.

I just got this note from a colleague who works for that organization:

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Dear Jim,

This week the President signed H.R. 3221, Housing and Economic Recovery Act of 2008, into law. The bill contains a provision (SEC. 2113) which forbids FHA from insuring mortgages in which the borrower’s down payment comes from a private down payment assistance provider, beginning October 1, 2008. As of this date, the minimum down payment will be increased from 3% to 3.5%.

The consequences will be devastating! By FHA's own estimates, DPA (Down Payment Assistance) comprises nearly 40% of FHA's volume. This means more than 300,000 working class families will be locked out of homeownership in the next year alone. Communities across America will take the brunt of the $50 billion in lost real estate sales, not to mention the indirect impact on the real estate, mortgage and building sectors that will be forced to shed tens of thousands of jobs due to this dangerous legislation.

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It sounds a little dramatic, which is fine. They need people in my business to take action to try and save these Down Payment Assistance programs.

The reality is tough - if a first time buyer is going to buy a home using down payment assistance THEY MUST CLOSE ESCROW BY OCTOBER 1ST. If their escrow closes on October 2nd? They are out of luck. The dollars will not be available.

What does this mean?

If you want to buy, and you were planning on getting 3rd party down payment help to cover a shortage of your own funds - we need to act quickly.

I'm not a salesman, you all know that by now. However, this may be one time when conveying a "sense of urgency" is necessary. Call me and let's get going!

- Jim

1 comment:

Marilyn said...

Keep up the good work.