Seller-Funded Downpayment Assistance for Pinellas Real Estate Purchases Soon to be a Thing of The Past
Effective October 1st, you can no longer have the seller pay your down payment on your Palm Harbor real estate investment, or even a hut in Timbuktu. Unless you’re a veteran of the armed forces, you 
will need at least 3% of your own or gifted money to purchase a home anywhere in the US – with no exceptions. The reason? The recent approval of HR 3221 and all that it entails.
The passage of this bill eliminates ALL seller-funded down payment assistance with FHA-guaranteed loans. In addition, if you were thinking of buying a new home, home buyers will no longer be able to rely on nonprofits that funnel money from home-builders into seller-funded down payment assistance programs.
HR 3221 therefore finalizes HUD’s long quest to end that practice as well. The US Department of Housing and Urban Development (HUD) claims that the provision of monies from the seller causes an artificial inflation in the housing market statistics. This is because the record of the transaction at closing, (known also as the HUD), reflects the price of the home to be higher to compensate for the closing costs paid by the seller (a fair argument).
The belief is also that the odds of the homebuyer defaulting on the loan triples as they are basically buying the home with no money out of their pocket but with money provided by another party. Seller-funded down-payment assistance has become extremely popular as it was used on more than 35 percent of all home purchase loans insured by FHA in fiscal year 2007. This is a dramatic increase compared to less than 2 percent seven years ago. We want you to be aware of how the changes can affect you and your home purchase plans. Feel free to contact us regarding this pending change.
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September 18, 2008 at 7:51 am, Mr. Save DPA said:
…I just thought you should know that there is a new website dedicated to saving downpayment assistance. The address is http://www.DPAGroundswell.org. This site contains an area where you can email comments/letters to your elected officials letting them know you want to help save DPA…FYI
December 04, 2008 at 2:10 pm, Pinellas Home Buyers Need to Know About FHA Loan Changes Effective January 1st said:
[...] detailed in an earlier post about the passage of HR3221, the seller can’t pay your down payment any longer, yet your Palm Harbor Real Estate [...]