Little guy could lose out again
By admin | June 26, 2007
Lower to middle class down payment assistance could be a thing of the past. Not that the system had been around that long, 1997, to be exact. Since the first down payment assistance program started, with Nehemiah in 1997, these programs have been able to grow to over 40% of the Federal Housing Administration’s annual mortgage production.
“Right now, low to middle class families are utilizing down payment assistance programs that are under scrutiny by the Department of Housing and Urban Development. These programs allow people, who qualify by income guidelines, to accept a monetary gift from charitable organizations - such as the Nehemiah Corporation of America - and use it for their down payments. This practice has helped thousands remove themselves from their dead-end rental situations.”
Over the past 10 years these programs for down payment assistance have helped over 1 million people achieve the American dream of becoming a homeowner. These organizations have distributed $3.8 billion in down payment assistance. There is no government money involved in these programs but the HUD wishes to eliminate these programs which could bring the tax payer into the situation.
“HUD’s proposal, titled “Standards for Mortgagor’s Investment in Mortgaged Property,” targets home buyers who obtain loans insured by FHA, by removing the option to use charitable organizations’ assistance or private funding with ties to the seller for down payments and closing costs. HUD claims this type of assistance has been an issue for many years.”
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