On July 15th, I asked the question , “Are Down payment assistance programs Cash-Back Fraud?
President Bush signed into law the housing rescue bill answering the Federal lawmakers opinion; Yes, they are cash-back fraud .
As of October 1st, 2008 (60 days) these Down payment assistance (DPA) programs will no longer be permitted.
Opinions differ on whether this is a good or bad move to ban Down payment assistance.
However, no one can argue that these DPA programs has been very beneficial for Arizona homeowners to qualify for FHA products.
Down Payment assistance has been an important substitute for Sub-prime mortgages for home buyers over the last 12-18 months as financing through sub-prime mortgages has all but vanished.
Many first time home buyers are now priced out of the market due to lack of down payment assistance and lack of alternative products.
Many buyers now have Zero options if they don’t have 3.5% down payment to buy a home. Yes, I know you are saying that if you don’t have 3.5% to put down than you are not qualified. And, yes, I agree many buyers are not qualified.
However, to group all buyers who qualify for seller contribution of down payments as non-qualified buyers seems to contradict what the theme of Housing Rescue bill was intended to do; stimulate real estate buying.
Some Real Estate industry experts are predicting a spike in sales as buyers who have been on the sidelines rush to buy using this program before it is no longer available Oct. 1, 2008.
However, the question is being raised of what happens to home prices and home sales after October 1st when Down Payment assistance is no longer allowed?
Will prices drop? will sales amounts drop? How much? 10% ? 20% ? maybe nothing?
Jim Belfiore, a Phoenix Real Estate analyst is concerned that drops in sales and prices could be severe in areas outside of Phoenix and Scottsdale in outlying communities of Goodyear, Surprise, Laveen, Queen Creek and Maricopa where, according to Mr. Belfiore “buyers use down payment assistance for nine out of 10 sales”.
I think banning down payment assistance programs (DPA) is a setback.
I understand the need to reduced loan exposure to riskier borrowers. However, in my opinion, limiting charitable down payments as a group is too broad.
Increasing income requirements, credit scores minimums, personal assets, requiring co-signers or reducing interest rates so payments for FHA approved buyers are some possible
However, You have a sixty day window to take advantage of buying your home using FHA financing and Down payment assistance.
Call your Mortgage Professional or
these mortgage experts below who are specialists in FHA loans.
Take advantage of using this valuable tool in a buyer’s market until October 1, 2008
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Copyright © 2008 By James Wexler, All Rights Reserved. *Ameridream (and Down Payment Assitance) Banned by new Law*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs
