Down Payment Assistance Phased Out

Going, going, gone!

As many of you know by now, President Bush signed the landmark Housing and Economic Recovery Act of 2008 at the end of July. The law covered a variety of housing related issues and items, but most noteworthy for homebuyers was making private down payment assistance (DPA) programs no longer available.

What does this mean to you?

Well, down payment assistance was the last widely used financing method where homebuyers could purchase a home with essentially 100% financing. The deadline to find a home and close is October 1, 2008.

But the real deadline is effectively this Friday, August 29th to lock your loan on a potential property. So if you haven’t started, you may have missed this opportunity. If you’re an active Smyrna Vinings homebuyer, the clock is ticking to make your decisions and get your contracts submitted and on to your lender.

Why is this? Well the majority of banks have set Friday as the latest date they’re willing to accept loan applications with down payment assistance. They obviously want to make sure they can get the loans closed by October 1st and as a result have created their own deadline.

So after Friday, you can pretty much work under the assumption that 100% loans are gone. After this, you will need a minimum 3.5% down payment to purchase your home if using an FHA loan or 5% for a conventional loan.

If you have any questions, feel free to contact us and we’ll be glad to fill you in on the details and discuss your options. And certainly, if you know of anyone thinking about purchasing a home, be sure to have them give us a call and we’ll be glad to advise them.

Coming tomorrow, we’ll cover some of the good news that came out of the Housing and Economic Recovery Act of 2008.

[tags]Smyrna homes, down payment assistance, 100% financing[/tags]

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