Down payment assistance programs have been under fire since last fall. It all began when the IRS came out challenging the tax-exempt status of down payment programs like Nehemiah, AmeriDream etc. The HUD issued orders to shut down the use of these program last fall. Such an action would have essentially ended the FHA loan program (which allowed the use of the down payment assistance programs to meet the minimum 3% down requirement). Talk about bad timing. But many of the down payment assistance programs sued the HUD and yesterday they won round one:
Sacramento-based Nehemiah Corp. of America won a key federal court ruling Monday that again blocked plans by the U.S. Department of Housing and Urban Development to ban its controversial down payment assistance program.
The housing agency announced in September it would ban the program within months, arguing that it triggered foreclosures and unfairly raised the price of housing for those who could least afford it.
From what my sources tell me, this ruling not only keeps Nehemiah alive but also keeps all other programs (like AmeriDream) alive as well. I just saw that Heather Barr, (North Phoenix Agent) had posted on this issue yesterday.
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Nonprofit’s Sue HUD for Barring Them From Providing Down Payment Assistance
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on Mar 6th, 2008 at 8:21 am
Thanks for the mention, Shailesh! In combiation with your “Yes We Can” post, I wish the NAR or Relator.com or somebody (anybody!) would spend some national advertising money to promote these programs. The level of pessimism in the general public and the general lack of knowledge about mortgages in the first time buyer set is so depressing. Every time I get the chance, I tell apartment dwellers that now is the best buyer’s market probably in their entire lifetime. We need to get the word out!
on Mar 6th, 2008 at 10:04 am
[...] Legal Disclaimer « Round One Goes to Down Payment Assistance Programs [...]
on Mar 6th, 2008 at 10:06 am
Heather,
These programs work fantastic. Maybe its because these are “real” loans. They require full income and employment verification and they have strict limits. It’ll only HELP people get into a home and build equity and be better off over the long time.
You’re right. This is a fantastic buyers market.