Downpayment assistance goes down the drain October 1st
Hats off to Paul Dunn, an FHA mortgage loan specialist located in Oro Valley Arizona, whose blog post,
“Help Save Downpayment Assistance-Join La Resistance”, opened my eyes to the fact that with the signing of the Housing and Economic Recovery Act of 2008 also comes the official elimination of downpayment assistance.
Unless there is a swift response, downpayment assistance will go down the drain October 1st.
Enter “DPA Groundswell”, a campaign to stop the elimination of downpayment assistance. This campaign is supported by The Congressional Black Caucaus, The United States Hispanic Chamber of Commerce, The Mortgage Bankers Association, The National Association of Home Builders and many other organizations. They believe the home buying pool will dwindle even further if downpayment assistance is eliminated.They are asking the public to support HR 6694 - the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 - which would keep downpayment assistance alive and well.
Why all the ruckus? FHA loans are a popular form of financing for middle-income and first-time home buyers. FHA requires a minimum downpayment for buyers - three percent. In the past, sellers were able to help contribute to the buyer’s downpayment in the form of a credit of closing costs, or a buyer could use a downpayment assistance like Nehemiah or Ameridream.
Elimination of downpayment assistance will delay or completely shut out a number of real estate buyers from being able to afford to buy a house.
Where do you stand when it comes to the elimination of downpayment assistance? For or against? Connect2Agent would like to hear your opinion … raise your voice by commenting below.
Posted by Rebecca D. Levinson
Tags: Ameridream, Connect2Agent, downpayment assistance, DPA Groundswell, Nehemiah, real estate
I’m a little torn on this subject. I am for down payment assistance, because I myself had the seller credit my closing cost, and had to put very little money down when buying my house last November. On the same token, I think we (America) need to get back to old time practices of saving money and not spending money you don’t have. I don’t think that people really have any business buying a house, if they can’t come up with 3 or 5% to put down on it. What if the home needs repairs or if they lose their job? They should have some sort of savings to use for these things. If they don’t even have money for a down payment, how will they afford to take care of the house. I am most guilty of this. I probably should not have bought a house. Sure I am making my payments, but if some major repair came along, I would be in trouble. If I lost my job, I would lose my house. It’s risky, and letting people get homes with nothing down is a big reason why we are in the financial mess we are in. Putting people in homes who couldn’t afford them. So I can see why they are putting an end to down payment assistance, but I think they should also focus on educating people on what it takes to own a home and how to manage money better. They should also make it affordable to more middle and lower class people to own a home. Homes are way over priced!
August 19th, 2008 at 3:49 pm
Christine,
Thank you for your candor. I lean towards your mixed feelings on the subject. I think part of the difference between past home buying and home buying of the present is that it may have been a little more common to get financial assistance from family than is it now.
At least for me, family assistance would never enter into my home buying equation. I don’t think all downpayment assistance needs to be eliminated- but I do believe a buyer should have some of the downpayment on their own.
Regardless, as a nation we need to learn to be more financially responsible.
August 19th, 2008 at 7:11 pm