HERE"S THE LATEST INFO FOR YOU

JUST GOT THIS EMAIL IN.

A few minutes ago I got an email mentioning that there were changes today in the HUD guidelines for the 8000-tax credit.

Thanks to the Mortgage Grapevine for keeping us informed!!

“The Department of Housing and Urban Development issued guidance that opens the door for FHA-approved lenders to provide short-term loans — with restrictions — to borrowers who are eligible for the $8,000 first-time home buyer tax credit. Borrowers must still come up with the required minimum 3.5% down payment using their own funds. But after that, they can use the short-term liens to increase their down payments, cover their closing costs or buy-down their mortgage rate. Calling the tax credit advance "another step towards accelerating the housing market," HUD secretary Shaun Donovan told the National Association of Home Builders' annual spring board meeting in Washington that the initiative is a "real win for everyone." The NAHB estimates the advance will lead to 160,000 more sales — 101,000 to first-time buyers and 59,000 to move-up buyers who are selling their current residences to first-timers. Tax credit loans made by state and local housing finance agencies, government agencies and certain nonprofit groups can be used to cover the minimum 3.5%. However, non-profits that receive fees from sellers cannot provide down payment assistance under this program. HUD didn't want to do anything that would allow "these seller-funded schemes back in," a senior HUD official said. The department has issued a mortgagee letter (2009-15) with guidance on acceptable interest rates and fees. "We are putting in place the necessary safeguards and consumer protections, and if monitored the right way, tax credit loans can be used efficiently and safely," secretary Donovan said.”

In reading this, it looks like HUD will be looking more to the local agencies to fund this rather than the DPA companies that were around in past years. If a non-profit does this, under those restrictions, the down payment requirement is waived.

The HUD letter says that it can be down either as second mortgage or a grant, and HUD will be monitoring the non-profits closely to make sure they are not charging “excessive” fees.

One sentence that pops out at me is the non-profits can’t receive fees from the sellers. Does that mean that a non-profit can charge the buyer? Could this be done as a reverse down payment assistance program?

Also I downloaded the printed up the letter from HUD, and there are more details there. If you’d like a copy, drop me an email to information@networkfundingla.com and I’ll be happy to forward you one.

I welcome your ideas and comments. I’m sure that there is someone out there that can come up with a plan to utilize this benefit. Let me know.

Thanks.

Mitch

www.networkfundingla.com

information@networkfunding.com

225-910-6053