Last chance to buy with No Money Down?
Aug 17th, 2008 | By Greg Long | Category: Finance-MortgagesThere are still options available to buy a house in Portland with zero down, but you must act fast to take advantage!
On July 30th, 2008, President Bush signed the Housing and Economic Recovery Act of 2008 which aims to stabilize the U.S. mortgage market. With the collapse of Subprime loans and mortgage delinquencies rising, the nations largest lenders have been suffering massive financial loses.
While this law has sweeping financial implications, buyers should be prepared for a major loan program change that they may have been planning on using.
One of the most popular loan products for home buyers today is an FHA loan. FHA stands for Federal Housing Administration. It is a U.S. government agency that does not lend money, but rather insures mortgages for lenders, allowing these lenders to offer more flexible underwriting standards. It is an extremely popular loan, especially among first time home buyers, or those with minimal assets to use as a down payment.
FHA loans require approximately 3% down for home purchase loans. Currently, borrowers are able to obtain this 3% from the sellers via Down-Payment-Assistance programs (DPA) such as Ameridream or Neihamiah. This effectively allows the buyer to obtain a 100% financing loan.
However, beginning October 1st, 2008, the new law will prohibit Down-Payment-Assistance programs. All mortgages involving DPA’s will have to be underwritten and approved by September 30th! Keep in mind, buyers may still obtain the 3% down payment as a gift from a family member, close friend, or employer.
Buyers with limited down payment funds should look to make a move over the next few weeks if they are planning on using a down payment assistance program.
For more information see CNN Money article
If you’d like to know more about the Housing and Economic Recovery Act or have any other mortgage financing questions, please do not hesitate to call Seth Harris with NW Metro Mortgage @ 503-336-6052
To start looking for a house to utilize this no money down assistance program call Greg (503-413-0027) or Bob (503-222-7623) or start searching here Portland Real Estate Search
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The “Access Mortgage” is the last hold out on the zero down loans in our marketplace. this is a special program that allows the 3% downpayment to come from a non-profit called the “national homebuyers fund”. The 97% first mortgage is not an FHA however, but a fixed rate conventional loan. more information can be found at http://www.pdxhomeloan.com/blog/?p=8
As a single mom with a great job but no fat savings account, I am a firm supporter of downpayment assistance. Don’t believe everything you read … it is NOT too late to get your downpayment assistance! I’ve been reading up on this issue and have found some great information from Nehemiah’s website. Members of Congress recently introduced The FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 (H.R. 6694). If passed and signed into law, this will allow downpayment assistance to continue INDEFINITELY. These programs need our help to get the word out. Visit http://www.DPAGroundSwell.org, a web-based community established to mobilize the growing industry opposition to the October 1 ban on seller-funded downpayment assistance.
Great news for DPA!
According to a recent article by: Matt Carter, Inman News, September 10, 2008:
“HR 6694 … is certain to pass the House of Representatives and has the blessing of the Department of Housing and Urban Development, Rep. Barney Frank, D-Mass., said at a hearing on foreclosures this weekend. The influential chairman of the House Financial Services Committee urged those attending a committee field hearing in Stockton Saturday to lobby the Senate — which shoehorned language banning seller-funded gifts into HR 3221, the sweeping housing bill signed into law July 30 — in support of the bill. Frank said the bill that would give seller-funded gifts a reprieve, HR 6694, has the support of HUD Secretary Steve Preston because it also addresses an issue near and dear to the department’s heart — risk-based pricing. HR 6694 … will pass the House, I can guarantee you. What you want to do now obviously is talk to your senators. We think it will go through there — it has the approval now of the Secretary of HUD.”
We’re making progress here. Don’t give up. Let’s do what Rep. Barney Frank suggested … Contact your Senators TODAY!