The Down Payment Assistance Industry
Primarily
down payment assistance grants are available from two different types of
services. First, government subsidized programs, and second, charitable
organizations that utilize a HUD/FHA rule that allows for Down Payment
Assistance (DPA) to be given to the homebuyer in the form of a gift or grant.
Government
subsidized programs are typically targeted towards lower to middle income
families. They will have set income restrictions and might dictate where and
what types of homes are eligible to be purchased. In some cases, only first
time homebuyers will be eligible.
Charitable
Organizations that are allowed to provide Down Payment Assistance Grants or
Gifts are relatively new. The whole industry is only about 6-7 years old and
was founded by a 501c3 in California called The Nehemiah Program. Shortly after
they developed a market for the industry literally hundreds of other groups
formed to provide Down Payment Assistance gifts to homebuyers. By mid 2003, the
Down Payment Assistance Gift industry was "helping" an estimated
17,000 families per month.
On July 30, 2008, the Federal Government passed H.R. 3221 - Housing and Economic Recovery Act of 2008. Section 2113 of the bill prohibits seller-funded DPA (Down Payment Assistance) for loans backed by the Federal Housing Administration. Prior to this bill, the seller could contribute up to 6% to the buyer to cover either a down payment or closing costs on an FHA loan. The changes are effective October 1, 2008. This bill is means the Elimination of Non Profit Down Payment Assistance.
Only Government funded housing grants are available for Down Payment Assistance under theAmerican Dream Down Payment Assistance Act.
Follow the link for the housingprogram in
your area.
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