Two weeks ago a bill was introduced to reinstate seller-funded downpayment assistance. With all the focus on the stimulus package, it's important to keep our eyes on some of the other bills being introduced that can also work towards stimulating the economy, especially in the key area of housing. The FHA Seller-Financed Downpayment Reform Act of 2009 (H.R. 600) is a bi-partisan bill that would reform seller-funded downpayment assistance (DPA). H.R. 600 is the 2009 version of last year's bill H.R. 6694. This bill would restore downpayment assistance programs for qualified homebuyers who need just a little bit of help to buy a home.
A report issued by the Congressional Budget Office (CBO) confirms that H.R. 600 would not cost the federal government or taxpayers any money. In fact, the Congressional Budget Office estimates that seller-financed DPA will generate $65 million over the next five years and save taxpayers $13 million next year.
Reinstating DPA could help ensure continued liquidity in the stagnating housing market by providing aid to an estimated 600,000 working-class people for home purchases next year, generating $150 billion in home sales. The latest version of DPA has toughened credit requirements, increased mortgage insurance premiums and made other improvements to safeguard against unqualified homebuyers.
Having been in real estate for many years, we have seen first-hand the benefit of seller funded downpayment assistance programs such as Nehemiah. Many credit worthy first time home buyers can afford a home, but have trouble coming up with such a large amount upfront for their downpayment. This program has helped many buy a home and succeed at homeownership.
Click here to view HR 600.
Labels: downpayment assistance, DPA, hr 600, nehemiah
Seller-funded downpayment assistance on Federal Housing Administration loans could get a second life under a bill introduced by Rep. Al Green, D-Texas, that also authorizes the FHA to charge risk-based premiums. The Green bill would repeal sections of the recently passed housing bill that bans seller-funded downpayment assistance and institutes a 12-month moratorium on risk-based pricing starting Oct 1. The bill (H.R. 6694) would require the FHA to charge higher mortgage insurance premiums for homebuyers with credit scores below 680 that receive seller-funded downpayment assistance from nonprofit groups, such as Nehemiah Corporation of America and AmeriDream. Borrowers with credit scores below 620 would be charged risk-based premiums. "I have introduced this bipartisan bill to revive this critical program under new standards that will effectively balance the risk of potential foreclosures with the goal of increasing homeownership," Rep. Green said. The Texas congressman introduced the bill on July 30 just before the House adjourned for the August recess. (source: National Mortgage News)
Labels: ameridream, downpayment assistance, FHA, hr 6694, nehemiah, seller funded
