Earlier this month, the HUD had issued a statement announcing that it would prohibit borrowers from using seller-financed down payment assistance programs. The major assistance providers have filed suit against this ruling. The courts have not issued an injunction, at least not to my knowledge. However the HUD did come out late last week and granted AmeriDream an exception until Feb 29, 2008.
Below is an excerpt of the announcement:
At the request of AmeriDream, HUD has voluntarily agreed today that the HUD rule banning seller-funded down payment assistance will not be effective with respect to AmeriDream until February 29, 2008. HUD will recognize all applications that have a signed sales contract prior to the effective date according to Congressional testimony provided by HUD.
This agreement applies only to AmeriDream. AmeriDream will be able to fund gift applications received until February 29, 2008, and will be only one of two entities that may offer seller-funded down payment assistance after October 31, 2007.
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on Oct 23rd, 2007 at 9:12 pm
And voila, my pending AmeriDream transaction that was “mysteriously” tied up in underwriting all last week was granted final underwriting approval as soon as the HUD extension was announced. Hmmm, coincidence? I think not. But I also care not - my seller’s happy and the buyer’s ecstatic. Thanks for bringing the news, Shailesh.