Is the AmeriDream and Nehemiah Down Payment Assistance in Arizona Going Away?

Let's see my buyers need 6% down and EVERY seller has turned them down so far.  It is so insane out here.  I think bad things are going to be happening in the Salem market this fall...

Hi Teri - Here in Mass the FHA program has become the loan of choice. With 3% down and relaxed credit this makes a lot of sense for all the borrowers that were going with no money down.

Teri, A lot of borrowers need the AmeriDream and Nehemiah Down Payment Assistance programs.  And yes, congress is looking to take it away.  They tried late last year to early this year.  The Nehemiah program is sending out flyers to contact your Representatives to support these programs.

About the 6% Nehemiah in response to one of the comments:  I would present the program as a way to sell the home at close to current price taking into account the 6% vs. having to reduce it more than the 6% and then have offers that ask for seller credits to.  Also, I have found that a combination of 7% of Nehemiah and seller credits covers the the down and almost all closing costs. (Note: you can have up to 6% Nehemiah (3% down and 3% closing) and 6% seller credits but good luck in getting that from a seller).  AJ

Melina, sellers are actually going for the 6 percent contribution for the buyers. Recently closed on a property for over $450K with 6 % contribution from seller. Buyer had over 100K down.....;-)

Bill, yup, that has been the favorite here as well. ;-)

Al, I remember using the Nehemiah program in 2001-2002 before the market went crazy. Seems to me it went away for awhile....or maybe just none of my buyers were using that since it was a seller's market? As I said above, many sellers are contributing.....at least here in Arizona. ;-)

TERI, Nehemiah is becoming fairly common here.  There really are no longer any 100% loans and so that is about as close as you can get.  Unless you are a Veteran; that's about the only 100% loan around here.  Which is kind of cool that our Vets are the ones who can still get 100% loans; they deserve it.

By the way I have had problems getting in to your blog.  I get an error message.  It happens to me quite frequently but only with your blog.  I wonder if anyone else is experiencing it.  This time it took me 3 times and one time it totally locked up my computer.  I was determined!!

Marchel, how weird....I wonder if others are having that problem as well? Thanks for the head's up and for your determination. ;-)

Teri, my lending partners here say they are using Nehemiah.

Gary, that's what my loan officer uses as well. Hopefully it doesn't go away. ;-)

I haven't used it yet, but as far as I know, it is still around here in CA.

Carol, I would suspect that many of the prices in California are out of range for FHA. What is the FHA ceiling there now? ;-)

Most of my first time homebuyers use some sort of downpayment assistance program. Losing this avenue greatly reduces their ability to own a home even if they have good credit and little debt. It's that initial hump that keeps them out of the market for a few months. Though I suspect we'll see housing relief in other forms, and possibly with different names- the short term effect of losing such programs would not be good for the housing market.

Teri- The FHA ceiling is $729K and change.  Which is pretty reasonable- we have a lot of homes in that price range.

MexiVest, and many of mine do as well. I fear that more and more buyers will be unable to purchase their own homes if this continues. ;-)

Carol Lee: really? That's amazing......our's -  I think - is $400-ish. The difference in states, huh. Of course 3% of 700K is a BIG amount of change; however, with sellers wanting to sell their homes, I suppose $21K might not be a deterrent. ;-)

Teri- $400K doesn't get much house out here in Ventura County where I am.  Maybe in the outlying areas, but not here!

Carol, I know....I formerly lived in Santa Clarita, so I know what the market is like in California. Sold my home and moved to Arizona.....;-)  LOVE the prices here.

Teri - I had 3 sellers last month contribute 6% towards closings and all three used Nehemiah to purchase.  If the program goes away...  so will the buyers.

Hi Teri: Because the 100% financing programs have pretty much dried up and the 5% down money is tight, gift programs such as Nehemiah are about the only game left in town. When used in conjunction with FHA, the buyer puts down nothing and pays no closing costs.

I closed a Nehemiah loan last week with the seller paying everything for the buyer. But that was a regular seller, not an REO. I'm finding that REOs will allow Nehemiah, but only to the extent of paying the buyer's closing costs. They aren't as willing to fund the down payment. Buyers who need the entire 6% are better off looking for an individual seller to negotiate with, and those are hard to find with so many REOs dominating the marketplace in some areas.

They've been trying to shut down the Nehemiah program for a while. It's still in jeopardy.

Part of the objection to Nehemiah by its critics is the sales price often ends up inflated to cover the 6% contribution. But in the escrow I just closed, we negotiated $20,000 off the list price, plus the seller contributed 6% out of the balance. And I don't see anything wrong with that.

The seller also pays $599. It went up $100 last month from $499.

I work closely with an investor from your area and 52,000 listing is unreal to me.  We've gone from 13,500 to 18,500 and I thought that was drastic.

Give some of the "down markets" in the US it really makes sense that lendors require a downpayment for the purchase of a home.

Always on the same page.  I liked that you asked real estate agents from other states what they were seeing in their markets.  Good thing for the right buyers but can have its drawbacks.  As does any program with higher risk.  Anytime we lend, technically 100% on a purchase price to the buyer, there can be some adverse situations that arise.

Debbie, same experiences here. It is very common for buyers to ask for 6%...and seller jump at the opportunity. ;-) Nehemiah is such a great program for buyers that don't have the funds to come in with $$ for a downpayment.

Elizabeth, good point. REO's are tougher all around.

Tracy, at one time (January 2005), we had less than 7,000 active listings. Look at us now! ;-)

Eric, thank you. ;-)  I always enjoy the feedback from others. Thanks for coming by, and for your thoughts.

This program maybe going away everywhere which is really a shame as it has helped many of my first time home buyers become part of the American dream and get a home. I suggest you go to their websites and sign the petition to keep these programs alive that is going on in the courts and through congress right now.

Save Ameridream program
If you haven't done so, go to this website, http://www.rallyforhomeownership.org/

It only takes 30 seconds.  This form will go to your local Congressmen and Senators.
CONGRESS MEETS ABOUT THIS TODAY! 

HUD should modify to lessen the risk BUT don't get rid of it.  This is one of the last programs out there right now that can get buyers into a home with no money.  (They still have to credit and income qualify)

http://activerain.com/blogsview/605114/Down-Payment-Assistance-Congress

Todd, hopefully it stays. We need it - for the buyers that actually can afford to make the payments. ;-)

a new bill, The FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 was introduced by several members of Congress on Thursday, July 31, 2008. Representatives Maxine Waters, Gary Miller, Al Green and Christopher Shays sponsored this bill that if passed and signed into law will allow downpayment assistance to continue indefinitely.

Scott Syphax, President and CEO of Nehemiah Corporation of America praised this group earlier today.

"Maxine Waters, Gary Miller, Al Green and Christopher Shays have demonstrated the willingness to understand all sides of this issue and the courage and leadership to follow their conscience. All those who understand the importance of working class American's having their shot at homeownership, need to work together to encourage our elected officials to pass this bill."

Click here to help and contact your local elected officials, http://capwiz.com/nehemia/issues/alert/?alertid=11598811

Thanks for the update....I'll check it out with my lender. ;-)  Hopefully it is a REAL fix....;-)