Home Buying in Fate>Question Details

Lucy Rangel, Home Buyer in Fate, TX

Does anyone know how are first home time buyers going to come up with downpayment and closing costs once the?

Asked by Lucy Rangel, Fate, TX Thu Aug 21, 2008

grants and programs end.Is there anyway that the builders can help with this or are we just going to have to sit back for some years and save enough for these costs.I ve been renting for 5 years and I was working on my credit , and now i hear about these and it just throws me back 50 feet from my dream home.

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Help for first-time homebuyers has NOT gone away. What has been prohibited is a seller making a donation to a DPA (down payment assistance) provider and the DPA in turn making a gift to the buyer. That prohibition will come into effect for borrowers not credit-approved by 9/30/2008.
Gifts and grants will still be available, just not seller-funded ones.
Ask your loan officer about what programs are out there. You will be pleasantly surprised. However, the old days of having the Realtor raise the sales price by $3,000 so the seller can contribute $3k to Nehemiah for a buyer gift are over. So, builders are sellers, hence, none of that will be possible after 10/1.
Web Reference: http://www.Mortgages-TX.com
2 votes Thank Flag Link Thu Aug 21, 2008
Depending on your location, there may still be some bond money programs. These are still allowable by FHA because they are real gifts and not money laundered thru a charity and really paid by the seller.
These bond money programs come and go and have income restrictions.
Currently, FHA's 3.5% down is as good as it gets!!
The program also allows for 'real' gifts from family or charitable organizations. What you are hearing about going away are just the 'Seller Funded Down Payment Assistance' programs.

So, no, the builder cannot 'get around' the down payment issue.
2 votes Thank Flag Link Thu Aug 21, 2008
T.E. I must say. Very thorough but scary in context, no sugar coating or nothing... Lucy, the DP contribution programs are going away, but there is already legislation in the works to re-instate it. There are still more programs available with grants up to 5% contribution (not 3.5%) and fixed interest rates below market rates. These programs are provided by the State of Texas and are restricted to Agents with Affordable Home-buyers Specialists Designations. Keep saving and things will come around. Also remember, FHA limits the contributions that sellers can give ( up to 6%) & you only need 2.25% to put down. So in reality, the seller could pay your closing costs (3%) and contribute more in the form of allowances that can greatly assist the actual amount you have to bring to the table at closing. We did this for one of my clients and she walked away with a $365 check at closing after putting only $500 dollars in earnest money and $100 in option money! Good luck and keep your dreams alive!
1 vote Thank Flag Link Fri Aug 22, 2008
My guess is that it will bring families closer together again. Maybe I'm too idealistic, but I'm starting to see more and more families want to live on the same street or in the same neighborhood. I know my grandparents helped my parents with their first down payment. Maybe that will start to happen again, or perhaps brothers and sisters will help each other or perhaps the family will pull together and save together. (I love telling the story of one of my past girlfriends who together with her brother, sister, and mother got up at 5am every day and made over 100 sandwiches to sell at school every day for a couple of years so they could save money and pay cash for a car for themselves. It was interesting to see them share the car and how well they took care of it too.) We've been spending like crazy for years now on all kinds of things that don't really matter, so maybe this will be the kick we need that will make us think about family values again. (Sometimes I shutter when I see the massive amount of untouched toys in the homes I visit) When we did the 100% financing I think it was just too easy for people to split and give the house back to the bank when things got tough. Perhaps if they'd had 20% at risk they would have worked harder to work things out, so hopefully this is a positive move in the right direction. It may be a little painful in the short term, but hopefully beneficial to all in the long term.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Thu Aug 21, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Lucy, it's great that you've been working on your credit for 5 years.
The Downpayment Assistance Programs you are talking about are available through the end of September.
Have you spoken with a mortgage lender lately? A reputable local one. If not, why don't you meet with one and just see what they have to say about you buying a home. It is possible that you already qualify for one of the many packages currently available. If not, you and the representative can come up with a plan to get you ready to purchase.
Congratulations on the last 5 years!
I wish you much health, wealth and happiness in the next 5!
0 votes Thank Flag Link Fri Aug 22, 2008
Don't buy the book by the last spammer.... all of this info is free for the asking.
0 votes Thank Flag Link Fri Aug 22, 2008
Lucy,

I HIGHLY recommend you sit with a referred professional. Third Party information is usually not accurate.

As for the last response - I could not disagree more.

In ten years, the average renter saves 5000 dollars. That same person, same income who owns a home in the same time, builds over 50,000 in equity in their home.

1995 to 2005 - average renter networth = 4500 average homeowner networth = $190,000

do the math. Good luck.
0 votes Thank Flag Link Fri Aug 22, 2008
Save your money for a few years. What is the hurry?
0 votes Thank Flag Link Fri Aug 22, 2008
Hi Lucy, I am glad to know you are working to become a home owner. I will be glad to talk with you when you are ready to buy. You can visit me on my website.
0 votes Thank Flag Link Thu Aug 21, 2008
Don't give up- Keep working towards your goal of home ownership. It always seems that it is just out of reach and when changes come into play they can send you backwards. The downpayment assistance programs don't go away until Oct. 1- so try to move quickly to take advantage of this. If you can't move that quickly- there are neighborhood grants, state grants etc. towards down payment assistance. So talk to a lender who specializes in first time home buyers and set your sites on your new home..... or condo!
0 votes Thank Flag Link Thu Aug 21, 2008
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