I have been traveling this week and am just now playing “catch-up” with the current housing bill that was passed. I blogged about some of the highlights here, but thought I would go into more detail for people who are interested in what this means if they looking at buying a home with “no money down”.
What the bill means to you If you are looking at buying a home using down payment assistance money
With the passage of the bill, effective 10/1, down payment assistance programs are going away. This means that if you were planning on using a program like AmeriDream or Nehemiah to buy your home, you need to make sure that you close before 10/1.
As Jamie Geiger pointed out here, it is up to the lenders if they would like to discontinue this program prior to 10/1, so be sure to double-check with your lender to make sure they are still offering the program if you are planning on closing before 10/1.
With the seller-assisted down payment assistance programs gone, some people will still be able to use the Maricopa county bond money programs or other rural county bond money programs for down payment assistance, but as Shailesh pointed out — it is available on a first-come, first-serve basis and these funds are usually gone fast.
Lastly, I received an email from the rep at AmeriDream today that said:
Congress to REAUTHORIZE Down Payment Assistance
August 1, 2008
Last night, Congress introduced bipartisan legislation, H.R. 6694 that would reauthorize and reform charitable downpayment assistance. This bill would remedy a harmful provision in the new housing law which limits homeownership opportunities for low and middle-income Americans. The legislation, sponsored by U.S. Reps. Al Green (D-TX), Gary Miller (R-CA), Maxine Waters (D-CA), and Christopher Shays (R-CT) reauthorizes and reforms charitable downpayment assistance funded in part by sellers, which has helped over one million families and individuals become homeowners since 1999. The program was eliminated by legislation signed by President Bush on July 30, 2008.
The Green-Miller-Waters-Shays plan would re-authorize and reform non-profit downpayment assistance and secure it as an allowable source for FHA borrowers. The bill seeks to ensure that providers of the downpayment assistance operate in a transparent manner to guard against conflicts of interest. The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers.
It is important that you contact your elected officials in Congress and tell them that you support downpayment assistance and urge them to support H. R. 6694. To reach your elected officials, please call the US Capitol Switchboard at 202.224.3121.
To learn how you can support it, visit http://www.supporthomeownership.com.
AmeriDream continues to be your trusted advisor, bringing timely and accurate information when you need it most.
Will down payment assistance come back? I don’t know. But if you are planning on buying a home and getting a loan, either close before 10/1 or plan on having at least 3.5% of the purchase price for a down payment.
Oh, one last thought on this topic — someone asked me the other day — “Can I get a gift from my parents for my down payment?”
Yes.
And if your parents need to adopt another kid, I am available.
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