Not sure if anyone has written on this but, FHA plans to do away with their gift program. I currently has a listing under contract in which the sellers are giving this 3% gift money. The loan officer says we are okay since we are already approved for it. I hope so!
The Federal Housing Administration will prohibit borrowers from using seller-financed down payment assistance programs that have helped hundreds of thousands of people buy homes but have come under the scrutiny of federal authorities.
Here's a link to the article. http://www.sacbee.com/103/story/405223.html
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It's not a good thing....just one more thing to make it difficult for first time home buyers or people with low to moderate incomes.
This is not a good thing at all. There are a lot of people that can afford a home but need a gift from a family member.
As a listing agent we have come across the Nehemiah program and similar ones a few times. I personally I am not sorry to see it go. There must be a real good reason why a no money down program like this needs to be cut! I have come to the conclusion that some persons just need to rent. It is quite a feat for a home seller to entertain a contract with no money down, give a gift to a mostly ungrateful buyer, and then pay closing costs? Ans like the article says, no one really want's the sales price raised. Oh I forgot to mention, the seller is also paying the commission! If an offer came in your home, the seller's net would make you want to pass on a deal like this. The problem is that for most of us business has slowed to a crawl, and we are lamenting the fact we have no work. So even bad deals look good, but looks can be deceiving, and Nehemiah is not one of them.
Craig, yes just another nail in the coffin. It's too bad that when we revamp we throw the baby out with the bath water. Many of the home buyers rely on that assistance. It's too bad.
It is my understanding that only gifts from nonprofit agencies will not be allowed. I just hope they pass the 100% Loan in its place.