FHA Downpayment Assistance Soon To Be Gone
Now that both the House and Senate passed the Housing and Economic Recovery Act of 2008, and with President Bush likely to sign the Bill, you can wave goodbye to Downpayment Assistance Programs (DAP) like Nehemiah and AmeriDream for FHA loans. This law will go into effect Oct 1 2008.
If your a Buyer thinking of using a FHA loan, now is the time to buy! Along with baring the use of a DAP, the Buyer now will have to put 3.5% down.
Below is an excerpt from the H.R. 3221 Housing and Economic Recovery Act of 2008 (highlighted text done by me):
SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE.Paragraph (9) of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(9)) is amended to read as follows:
(9) CASH INVESTMENT REQUIREMENT-(A) IN GENERAL - mortgage insured under this section shall be executed by a mortgagor who shall have paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine.
(C) PROHIBITED SOURCES.—In no case shall the funds required by subparagraph (A) consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale:
(i) The seller or any other person or entity that financially benefits from the transaction.(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i). This subparagraph shall apply only to mortgages for which the mortgagee has issued credit approval for the borrower on or after October 1, 2008.’’
If your a Buyer thinking of using a FHA loan, now is the time to buy! Along with baring the use of a DAP, the Buyer now will have to put 3.5% down.
Below is an excerpt from the H.R. 3221 Housing and Economic Recovery Act of 2008 (highlighted text done by me):
SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE.Paragraph (9) of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(9)) is amended to read as follows:
(9) CASH INVESTMENT REQUIREMENT-(A) IN GENERAL - mortgage insured under this section shall be executed by a mortgagor who shall have paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine.
(C) PROHIBITED SOURCES.—In no case shall the funds required by subparagraph (A) consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale:
(i) The seller or any other person or entity that financially benefits from the transaction.(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i). This subparagraph shall apply only to mortgages for which the mortgagee has issued credit approval for the borrower on or after October 1, 2008.’’
Labels: AmeriDream, Downpayment Assistance Program, FHA, Housing Bill, Johnny Howes, Nehemiah
posted by Johnny Ray Howes at
3:49 PM
1 Comments:
Downpayment assistance may not be gone for good. Check this out!
H.R. 6694 Will Move to the Floor for a Full Vote
WASHINGTON D.C. – September 16 – A Bill that would save seller-funded downpayment assistance from being eliminated on October 1 passed the House Financial Services Committee today on a voice vote amidst strong bipartisan support. The Bill, The FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008, or H.R. 6694, is expected to move to the floor for a full vote in the coming days
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