31 Jul 08 
FHA Loans: Down Payment Assistance Programs
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So you want to buy a house and you have little or no money for a down payment!
You ask a relative for support and you get little in the way as a positive response.
What options are you left with?
Well for the savvy homebuyer you know that you are limited when it comes to 100% Financing knowing the closest option is 97% through FHA.
Side bar, I know there are other complicated, detailed and those loans that tease you with 100% financing but I am NOT going into detail on those because in my opinion those loans are SO difficult to close I will leave it up to someone else to be that expert and focus in on FHA financing and where we are headed.
I am back to business.
So if you have limited down payment and need more where do you turn?
Luckily you can find a “Down Payment Assistance Program for FHA Loans.”
There are several different programs out there but they all have one thing in common:
THEY ARE ABOUT TO BE ELIMINATED BY
THE NEW HOUSING BILL OF 2008!
I often wonder what officials are thinking when they put something like this into effect but honestly that is a topic I don’t care to discuss here or for that fact ever. I just try to remain focused on the outcome and what we need to do to move forward.
Personally I use Down Payment Assistance Programs for FHA Loans and my clients quite often. The Program I use is called Nehemiah and can be found at www.getdownpayment.com WAIT before you leave here for there you will still need to know a few things.
To use this program you will be facing some real issues getting offers accepted by home sellers but good news is that you will get the 100% financing you are looking for.
Now if this law truly remains as is we will see this program TERMINATED on October 1st 2008 so start looking soon if you plan on using this program but be prepared for a true test of desire because again, Sellers want little to do with this program.
How it works, when you write a contract you ask the seller to contribute 6% of the sales price to the Down Payment Assistance Program for FHA Loans. IF the seller agrees they pass 6% of the sales price to the Down Payment Assistance Program for FHA Loans and a small fee is collected by the program which in turn sends in the 6% back to escrow as a gift to the buyer.
Logistically speaking, the Down Payment Assistance Program for FHA Loans typically sends the money ahead of funding of the transaction and escrow coordinates the delivery of the funds and fees.
Now the real question here is “What will happen when Down Payment Assistance Programs for FHA Loans go away?” NOT forgetting the new changes around Buy and Bail!
I think these two things will REALLY impact the Real Estate Market across the board and it will be interesting moving forward.
As always I am here to help! You can find more topics at my BLOGS www.brentlane.wordpress.com and www.thelanegroup.blogspot.com
Brent Lane
Tags: 100% financing, brent lane, buy a house, buy and bail, down payment, down payment assistance program, fha, fha loans, homebuyer, housing bill 2008, nehemiah, new housing bill, real estate market, the lane group
30 Jul 08 Buy and Bail Revisited! Home Buying Loan Changes
So if you plan on looking or are already in the process of buying a new home I strongly suggest you make sure your still qualified.
Now I am going to lay out some guidelines that are commonly used to help people get qualified to buy a home and will detail what to look out for moving forward.
· Buy and Bail Revisited- I have documented several times here about the Buy and Bail Rules so now it is official! The new rules are now out and will go into effect on August 1st so make sure you lock in your loan before then or fall victim to the new rules.
Turning your current home into and investment property while attempting to buy another property, this is now a HUGE concern for lenders and the new rules states:
“If borrower is renting out their current home and purchasing a new primary residence, to use rental income to qualify, the following requirements must be met: 75% of rental income may be used to offset the mortgage payment in qualifying if there is documented equity of at least 30% in the existing property, derived from an appraisal.”
OUCH!
That one is Huge and should have a lasting impact on the Real Estate Markets all over the country. Previously all you needed to do was document with a lease agreement a reasonable rental income and then you could use up to 75% of that rental income to counter the existing mortgage payment regardless of equity position.
SO if you DON’T have the 30% equity you still have options, you will need to qualify to buy your new home using both new mortgage payments and existing mortgage payments against your debt to income ratio. (Qualify with both Mortgage Payments) The same would be true if you kept your current home as your second home.
· Credit Changes- In addition to these changes you will see that FNMA is tightening its’ credit guidelines. This will produce an interesting scenario further limiting new home buyers to those in relatively great financial positions, I guess that is the way it should be really.
Two changes in the credit area you need to be aware of:
First, No longer can you pay down installment loans to under 10 months or less and not have them used against you to qualify.
Second, Credit that shows no monthly payment because balance is due monthly will be held to 5% of balance as payment or proof account is paid in full by the close of escrow.
Also, Conventional financing just got even more credit sensitive so if you haven’t looked into an approval and think your mid-600 credit score is okay you might check again.
As always I am here to help! You can find more articles at www.brentlane.wordpress.com or www.thelanegroup.blogspot.com
Brent Lane
Tags: brent lane, buy and bail, buying a new home, credit, credit changes, equity, financing, home buying guidelines, investment property, mortgage payments, new home, pay down installment loans, real estate market, rental income, second home, the lane group
10 Jul 08 Buy and Bail: The Updates are in and Changes are Coming SOON!
You need to get out there and buy a new home now!
If you own a home, considered moving and plan on keeping your existing home the new lending rules will make that nearly impossible.
I wrote a week or so ago about this Buy and Bail topic and mentioned that banks had done little in the way of rolling out changes.
UPDATE: CHANGES ARE COMING AUGUST 1st , 2008!
If you don’t buy your new home before then you will have a new guideline to follow.
30% equity in your existing home!
You read that right!
If you don’t have that much equity then you will have to sell before you can move or you will have to qualify for both mortgage payments regardless of rental income!
Now for you big earners (salary or otherwise) out there this will have limited impact but for those who consider themselves “middle America” this could be a HUGE issue.
It should be interesting to see how this impacts the number of homebuyers in the market because those who own their home and are looking to buy and retain ownership may no longer have that option.
(Side note: I think it’s sad that this rule will force some “honest” people who would truly keep their home, rent it and make the payments to sell their home before they are ready)
BOTTOM LINE: You have 3 short weeks to buy and bail (or not to bail)!
As always, I am here to help so if you have comments please put them below and if you need specific help please contact me via my BLOG www.thelanegroup.blogspot.com
Brent Lane
The Lane Group
Tags: brent lane, buy & bail, buy and bail, equity, existing home, lending rules, lending standards, middle america, mortgage payments, mortgage rules, rental income, the lane group
