Down Payment Assistance Expiration Date Drawing Near

On October 1, 2008, a new government ban will terminate most down payment assistance programs in the United States.  The ban on these programs is part of the Housing and Economic Recovery Act of 2008, which was signed into law on July 30th.  Buyers will not be able to use seller funded down payment assistance for any mortgage backed by the Federal Housing Administration (FHA).   Over one million buyers and sellers have used these services since they became available.   Home buyers without a down payment face yet another challenge in this ever changing market.  The opportunity to purchase a home without a down payment will be few and far between once this bill beomes effective.  The FHA loan was the last 100% loan available and now it’s expiration is drawing near. Consumers may want to keep an eye on a bill introduced by Rep. AL Green from Texas. H.R. 6694 is calling for the FHA to accept seller financed down payments and to provide an interest rate to the borrower based on the credit score and perceived risk.  If you were planning on using a FHA loan program in order to secure a loan with 100% financing, now is the time to act.