If you have potential home buyers who are preapproved using a down payment assistance program, such as Nehemiah and AmeriDream, please be aware that FHA has made a ruling to ban DPAs. Down payment asssistance programs allowed sellers to contribute beyond the buyer's requirement of a 3% minimum down, effective creating a zero down program if you had a willing seller. HUD states that home buyers using DPA's are twice as likely to default on their mortgage. This takes effect as of October 31, 2007. Link to HUDs ruling.
Of course Nehemiah and AmeriDream are not going down without a fight. They've been through this before.
More to follow!
Stumble It!
