FHA Downpayment Assistance Alert

Nehemiah President and Chief Executive Officer Scott Syphax said Monday that Congress is “all but certain” to pass the July 11th version of the Senate housing bill which includes a ban on down payment assistance programs or DAP’s or DPA’s. While Nehemiah is the largest of the DAP’s, there are several others who will also be affected.

At this point, we do not know what the timing of this will be. Will Congress give borrowers until a certain date to get their applications in progress? Our guess is that they will, but only time will tell. What is certain is that any borrowers who are in need of these programs should get their loans in progress now.

Once these programs have been eliminated, this effectively eliminates 100% financing in the US at this time. The only option would then be a 3% gift combined with an FHA loan of 97%. No funds from the borrower are required when using gift funds on an FHA loan. This gift could come from either a family member, or a community down payment assistance or community second mortgage program. Keep in mind that the community down payment assistance/2nd programs have very strict limits on income. For instance, in Georgia the limits on the Georgia Dream program are in the $50k range for the household, though exact figures depend on the number of household members.

This article provides more details:
http://www.sacbee.com/103/story/1099122.html