Where can borrowers go now that HR 3221 Eliminates DPA Down Payment Assistance

As of July 30, 2008 as part of the Housing Reforms Bill , the seller funded gift programs will be no longer avaialble after October 31st. Seller funded gift progams were being used extensivly in recent months to assist borrowers with FHA loans at 97% and then utilizing the seller funded gift programs to cover the down payment. The seller agrees to contribute to a percentage usually 3-6% which is donated as a gift to the gift program provider wh then charges a nominal fee of about $400-500 and the money is then wired to the tile office to be put towards closing fees. This is essentially a loophole for seller or other interested parties to pay the closing cost on the down payment or closing cost. Seller-funded downpayment assisted FHA loans have a very high default rate. In 2007, the default rate on seller-funded downpayment loans was more than 28%, roughly three times the default rate on FHA loans without seller-funded downpayment assistance. There are a few other programs avaialble such as ADDI which will provide downpayment, closing costs, and rehabilitation assistance.ADDI's purpose is increase the homeownership rate, especially among lower income and minority households, and to revitalize and stabilize communities. The amount of ADDI assistance provided may not exceed $10,000 or six percent of the purchase price of the home, whichever is greater. To be eligible for ADDI assistance, individuals must be first-time homebuyers interested in purchasing single family housing. Contact us directly at www.Trinity1fn.com to learn more about your options
State and local programs are also available, for more details visit HUD.gov ,
http://www.ncsha.org/,
http://www.federalreserve.gov/,
http://www.fhlbanks.com/