Time Dwindling Away for Down Payment Assistance in Austin

Austin, TX — August 24, 2008
By: Christopher Brooks, The Real e-State of Austin

In less than 37 days FHA down payment assistance will be a thing of the past. If you are a buyer looking to buy a home in Austin and are seeking “gift” money in order to buy your home, you’d better act fast. I thought I would give you a friendly reminder.

To recap, on July 30th the President signed a new into law a bill known as the Housing and Economic Recovery Act of 2008. The purpose of that act was to restore confidence in Fannie Mae and Freddie Mac, provide taxbreaks for first time home buyers, and to help homeowners who are facing forclosure. The debate is still out whether it truly helps consumers or not however change is here to stay.

What happens after October 1st for FHA loans?

Down Payment Assitance programs such as Nehemiah, Genesis, Ameridream and others will no longer be able to process gift funds. As an alternative you may be able to seek out state and federal downpayment assistance programs which are not affected by the law at this point, otherwise you will have to pony up the downpayment in full.

Downpayment requirement will increase from 3% to 3.5%

Increased counseling education for homebuyers to provide stable ownership.

You must have your loan in underwriting prior to October 1st in order to still be able to use downpayment assistance.

Instead of using your money as a downpayment, why not keep the liquid cash fo repairs and upgrades?

So if you are sitting on the fence, you may want to jump down and get in while you can. From what I have experienced with clients and talking with colleagues, there has been a spike on buyers rushing to beat the gun. Will you be one of them?

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For additional information, please contact Shelley Mitchell, smitchell@nehemiahcorp.org, 916-231-1999.

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