Unfortunately, I've experienced the same scenario one too many times and the end result has always been the same......an excited home buyer goes crazy over USDA Rural Development's 100% financing loan or HUD's $100 down payment program and mistakenly think that this means that purchasing a new home can be done with NO FINANCIAL INVOLVEMENT OR COMMITMENT on the part of the purchaser whatsoever!!! This couldn't be farther from the truth!!
As frustrating as this problem may be, it still falls back into the realms of an improper Buyer Consultation...As Realtors, present company included, we MUST ensure that our clients fully understand the financial commitment involved in purchasing a home...PERIOD!!!
Here's a list of bulleted points to remember when purchasing a home....
Knowing the costs involved prior to beginning the process is the best way to ensure that you're well prepared to purchase a home....otherwise, it can become a VERY stressful process!
Toodles!
You hear the news everywhere....."The stars, moon, and sun have all aligned and NOW is the perfect time to buy a new home (especially if you haven't owned real estate within the past three years)". With low interest rates AND home prices.....the conditions are optimal to live the American Dream. What else??? You can even purchase a home with as little as 3.5% down payment...Sounds pretty benign, huh??? Until you begin mentally calculating exactly what 3.5% actually computes to be. Then the panic sets in....
3.5% I DON'T HAVE THOUSANDS OF DOLLARS SAVED FOR THE PURCHASE OF A HOME, PLUS CLOSING COSTS, MOVING EXPENSES, DEPOSITS, LITTLE JOHNNY'S BRACES, ETC!.....
Then......
A ray of light shone your way via the Georgia Dream Homeownership's NSP Program and/or The Federal Home Loan Bank Grant Program!!! Then, you were told that you could purchase your new home, foreclosure or not, with down payment assistance funds to assist with home repairs, closing costs, discount points.....Suddenly, you were able to breathe again and Little Johnny's teeth would continue the straightening process! Needless to say, you purchased your home and is now living happily ever after. In fact, you were so pleased with the process, your Realtor, your mortgage broker, and the closing attorney...you felt the need to share your experience with your closest buddy.
Buddy is soooo excited about the possibility of purchasing a home that he immediately contacts your Realtor who tells him.....Unfortunately, the glorious down payment assistance program that helped your friend purchase a home has run out of money....
NOOOOOOOOO!!!!!!!!
Well, Buddy....hold on a minute!!! THERE ARE SOME GRANT PROGRAMS AND 100% FINANCING PROGRAMS THAT ARE STILL AVAILABLE TO YOU!!!! For instance, The USDA Rural Development Program provides 100% financing for owner/occupant first time homebuyers who purchase properties within their eligible areas, The Georgia Dream Homeownership Program is still providing down payment assistance up to $20,000 for first time home buyers, AND you can STILL purchase a HUD owned property for as little as $100 down with an FHA mortgage!!! In addition, many Metro Atlanta Counties has grant money available for first time homebuyers....
The key is to contact a Licensed Realtor to discuss your options and GET READY TO MOVE!!!!!
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In my neck of the woods, it appears that HUD-owned properties are the hottest things smokin' since the advent of the Fourth of July cookout! These properties (especially the really good ones) are flying off of our local market and many times result in a multi-bid situation that drives the purchase price as high as 25% over list....and because of my competitive nature, I ALWAYS check to see the winning bid amount on any of the ones in which we didn't have the winning bid and I'm starting to notice something....
I'm starting to notice that a majority of the bids are now being placed by "owner occupants". In fact, one property had 25 BIDS AND NOT ONE WAS AN INVESTOR PURCHASER.......Hmmmmmm....
SOMETHING SMELLS REALLY FISHY!!!!
Are agents aware that HUD charges a fine up to a big, fat, whopping $250,000 and a prison term of no more than 2 YEARS!!!! Not only that...the Feds will investigate the buyer, the agent, the brokerage and everyone else including your grandma!!!
I'm wondering if anyone has noticed this serious violation and whether or not HUD actually enforce this policy????
Just a point to ponder......
The Georgia Dream NSP Purchase Program was created to encourage the purchase of foreclosed properties. Funds utilized are an allocation of federal dollars received by the Department of Community Affairs from the Housing and Economic Recovery Act of 2008.
The program provides $14,000 to eligible borrowers purchasing foreclosed properties in eligible areas. Funds are disbursed in the form of a second mortgage lien with no interest and no monthly payments. The lien is released over a period of five years and six months. Funds may be used for required repairs and/or down payment assistance.
This program begins April 1, 2009 and all funds must be disbursed by June 30, 2010.
How do I apply?
Frequently Asked Questions:
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