Comments on: H. R. 600: A New Bill To Restore FHA Seller Assisted Down Payments

By: Carl Pruitt

Carl Pruitt — Mon, 26 Jan 2009 23:21:16 +0000

I have defended DPA many times on here. There are two sides to it all. First, there is no doubt that real estate prices have gone up too fast because too many people were given the opportunity to buy a home. As much as those of us in the real estate/mortgage industries don’t want to believe it, owning a home isn’t a birthright and not everyone is suited for it. People who are loaned the money to buy a home should have demonstrated an ability to live below their means. Owning requires more cash flow than renting. You can’t call the landlord to fix things or maintain the lawn.

Because it has been too easy to buy a home, prices have been artificially increased. A lot of the benefits attributed to down payment assistance programs have been phantom equity increases that weren’t supported by a real economy. The economic reality is that prices MUST come down to solve our countries economic problems. Nothing government does to artificially support prices is going to do anything but delay the pain for a little while. It isn’t a coincidence that prices have fallen at a record level and home sales have then gone up.

On the other hand, I don’t believe that DPAs are the inevitable cause of all the foreclosures as HUD has maintained. All we need to do is use the common sense underwriting FHA is famous for and account for layered risk. If someone puts no money down, but would have substantial reserves if they used down payment assistance, they should be more prepared to own a home than someone with no reserves. We should be very careful of debt ratios with 100% financing. Even people who might end up underwater temporarily with their home loan will keep paying if they have appropriate debt ratios.

Perhaps it is time to come up with an FHA program closer to the VA model?

By: Angel

Angel — Mon, 26 Jan 2009 22:52:23 +0000

If reinstating down payment assistance (DPA) will help stimulate our desolate housing market, I hope we will all keep an open mind and figure out ways to make the program better. From my vantage point, we need DPA now more than ever.

By: Carl Pruitt

Carl Pruitt — Mon, 26 Jan 2009 22:13:09 +0000

Because too many people were abusing the system and buying another home while presenting a fake lease on their former primary residence, HUD had to stop allowing anyone to count rental income on their previous primary residence to offset the payment. One of many instances in today’s mortgage mess where the honest have to pay a price for the scoundrels.

By: Carl Pruitt

Carl Pruitt — Mon, 26 Jan 2009 22:11:14 +0000

At present, there is no seller funded down payment assistance. There are programs on the state and local level. The best place to start looking is with your local housing authority.

By: Mary

Mary — Mon, 26 Jan 2009 22:06:23 +0000

The elimination of DPA programs is catastrophic at a time when qualified homebuyers are needed to purchase homes.

The Congressional Budget Office (CBO) estimates that seller-financed DPA will generate $65 million over the next five years and save taxpayers $13 million next year.

Downpayment assistance programs have the potential to add 235,000 more jobs without costing the taxpayers a penny.

Please express your support for H.R. 600 that reforms and restores DPA now by visiting http://capwiz.com/nehemia/issues/alert/?alertid=11709431 . It has a helpful area to compose a message, which will be sent directly to your Senators and House Representative.

Thank you for your time.

By: Carl Pruitt

Carl Pruitt — Sun, 25 Jan 2009 22:05:03 +0000

That part of the bill was not in the final law that was passed. They were going to make it possible for brokers to use a bond instead of an audit. Keep in mind though that it is often as difficult to obtain the bond as it is to pass the audit. At the present time, lenders must all submit yearly audits.

By: Zina Diggs

Zina Diggs — Thu, 22 Jan 2009 14:07:14 +0000

How do I apply for the down home assistance?

By: C OGDEN

C OGDEN — Wed, 21 Jan 2009 23:42:34 +0000

ARE BROKERS STILL BEING REQUIRED BY FHA TO HAVE A YEARLY AUDIT?

By: C OGDEN

C OGDEN — Wed, 21 Jan 2009 23:41:05 +0000

I HAVE A QUESTION, I HEARD A BILL (1852) WAS GOING TO HELP BROKERS, THEY KNOW LONGER WOULD HAVE TO HAVE THE COSTLY AUDITS THAT FHA REQUIRES YEARLY. DO WE HAVE A ANSWER TO THIS YET?

By: Les Carpenter

Les Carpenter — Wed, 21 Jan 2009 23:33:22 +0000

our problem is my wife is a RN and does not drive and i am semi retired. Her place of employment is 30 miles each way so when she work one day I drive over 120 miles so she can work. We hand qualified for a FHA loan in the town she worked and a week later we was told we did not qualified for the load as out house in Sacramento was a debit only and not a asset with the rent we could have received. Is there any thing new with rent of a home as a income and not a debt in the works.thanks