Notice of Elimination of federal Non-Profit Downpayment Assistance
This information is for reference only as the below federal downpayment assistance programs were eliminated on July 30, 2008, President Bush signed H.R. 3221 – Housing and Economic Recovery Act of 2008 as a result of the housing crisis.
Specifically, Section 2113 of the bill prohibits seller-funded DPA (Down Payment Assistance) for loans backed by the Federal Housing Administration (FHA). The changes took effect on October 1, 2008. Check here as your state may continue to have resources available for downpayment assistance.
Downpayment assistance most commonly comes from government subsidized programs and non-profit charitable organizations. These programs are nationwide as well as specific state by state programs. Downpayment assistance for home buying can target low income families or middle income families. Most, if not all programs are for first-time home buyers.
But keep in mind the definition of a first-time buyer for a majority of the programs means you could not have purchased a home in the previous 3 years. It does not mean that you are barred if you have purchased homes in the past and are currently a homeowner.
The majority of downpayment assistance programs will require you live in the home. Each program will have its own guidelines and not all borrowers will qualify. Below are a few nationwide programs and state-by-state programs.
The Nehemiah Program
Nehemiah is the nation’s largest privately funded down payment Provide Gift funds up to 6% of the final contract sales towards your downpayment and/or closing costs.
- Provide Gift funds for both first time and repeat homebuyers.
- Provide Gift funds for both new construction and resale homes.
- There is no repayment of gift money.
- There are no income or asset limits.
- No geographical restrictions
American Dream Downpayment Assistance Initiative
This is a fairly new program (since 2004) that provides grants to help home buyers with downpayment and closing costs. The program assists first-time homebuyers, low and moderate income individuals and families. Highlights of the program:
- Grant recipients must be first time home buyers with annual incomes that do not exceed 80 percent of the area median income.
- A maximum down-payment grant of $10,000 or 6% of the purchase price of the home, whichever is greater.
- The grants help to defray the upfront costs of purchasing a first home and can also be used to offset the costs of rehabilitating the property.
- Grants may be used to purchase one-to four family home units, condominium unit, cooperative unit or manufactured housing.
Ameridream’s purpose is to expand affordable housing opportunities to first-time buyers and low to moderate income individuals and families who wish to achieve homeownership. They offer down payment assistance in the form of a gift (typically 2-6 percent of the sales price) for single family homes valued up to $322,700 and multi-family homes up to $620,500. Gift funds can also be used to pay closing costs. Here is how it works:
- Contact AmeriDream for a qualified real estate professional and qualified mortgage professional in your area if you are not already working with one.
- Shop for a home you like.
- Make an offer on the home.
- Once the contract is ratified, your lender will submit a gift application on your behalf to AmeriDream.
- The Homebuyer will receive a notice of gift approval from AmeriDream.
Partners in Charity
Partners in Charity is a nonprofit organization that gifts downpayments to qualified home buyers. There is no repayment requirement, no second mortgage or lien placed on the home. Partners in Charity offers from 2 to 10 percent downpayment assistance towards the home purchase. There mission is to gift down payments and in turn help the community as a result of homeownership.
*Depending on the funding source some of the programs may or may not be currently available. These lists are in no way complete and full and rebuildcreditscores.com makes no guarantees or warranties as to the completeness.
Please visit: http://www.hud.gov/buying/localbuying.cfm for a state by state listing of downpayment assistance programs.