Home Buying in Indianapolis>Question Details

Ryan, Home Buyer in 46250

Zero Down/Buyer-Assist Down Payment/Closing Costs Still Available?

Asked by Ryan, 46250 Mon Sep 1, 2008

After checking out several areas in Indy, we are ready to narrow our search to one particular area. Our lease ends in (2) months and we want to get the ball rolling on home ownership. We are pre-approved and pre-qualified well within our search criteria.

My only concern: The Realtor we had show us a couple properties months back (really too early on to buy, with the lease still extending for months) mentioned that the zero down and buyer assisted down payment programs are no more. Yet, I am reading online they are available for yet another month?

I just wanted a candid response. As first-time home buyers, we really do not want to empty out savings to buy a house. If there are programs out there for no money down, I would like to act. We'd like to buy a home soon, and get moved in before the weather cools.

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If you're really pre-approved, this should all be settled by now. And if you're that far along, it's disappointing these concerns haven't been discussed with your mortgage specialist. Maybe you're dealing with an internet call center, or a jack-of-all-trades at a bank... The program your Realtor was referring to is seller-paid down payment assistance on FHA-insured mortgages. It's not actually a program at all, but rather a loophole that the feds opposed and that was closed with the recent housing bill. You may think there's another month left, but in a practical sense, there isn't... FHA loans still require only minimal down payments, and FHA loans still allow those down payments to be in the form of gifts (from your family, for instance). And there are other government and conventional loan programs that allow you to buy a home with little-to-no money down.... Please feel free to contact me to discuss this further. Our company is a goverment-approved lender offering all types of government and conventional loans in most states, including Indiana (in fact, I'm a Hoosier myself). jwheeler@apexlending.com
1 vote Thank Flag Link Mon Sep 1, 2008
DPA ends in 6 Days. Support H.R. 6694 to bring back DPA. More info at http://www.dpagroundswell.org or http://www.myIndyHomeSearch.com
0 votes Thank Flag Link Wed Sep 24, 2008
Here is an excerpt on what my mortgage broker recently sent me :

"Also, the new requirement of 3.5% down for FHA doesn't take effect until 1-01-09. However, don't forget that 10-01-08 is the effective date for the elimination of Seller Funded DPA's and also marks the implementation the new Mortgage Insurance premiums for FHA."

Looks like seller provided gifts are coming to and end this October, but only from January you will actually have to put 3.5% down

One potential solution for this is to buy a property through a lease option, accrue credits (i.e. our company gives $100/month back in form of accruals) which ultimately form the dowpayment. So if you put down say 2500 and acrue 24 months of $100 each, you are getting to your downpayment. Click link for more details.
0 votes Thank Flag Link Sat Sep 20, 2008
As a Reltor I must say the down payment assistance program situation is really confusing. I have talked with several lenders that have already stopped offering loans using down payment assistance. The one zero down program that is and will coninue is VA, I am assuming you are not a military veteran.
For the past 10 years I have kept on top of most zero down loan programs I would expect them to return, just don't know when.
You might have your agent check with some local banks, there is at least one that offers zero down that has some income restrictions and is for Marion county only.
0 votes Thank Flag Link Tue Sep 2, 2008
Well... the federal program you're talking about is probably a boat you've missed. It is technically available through 10/1, but many lenders are no longer taking contracts, or they have deadlines like Bank of America - you have to be in their system by tomorrow, and have identified the property by the end of the week? You don't want to rush into this.

However, there may be other options available for you depending on what you do for a living, non-profits in you area, etc. etc. You need to be in touch with several lenders. In Virginia, our state housing authority has a no money down program. There are also local funds for county and town employees.

I've heard a rumor, but it's not quite clear how this will work - we're still waiting on the Mortgagee Letter regarding further information on the recent legislation... but I HEARD that there will be a way for a buyer to get to the first time home buyer tax credit to use towards a down payment. Again - that's not in affect yet.

I think you've picked a tough time... we're in transition. The most common program is going away, and we don't yet know what will replace it - at least federally. Look for local opportunities. I expect banks will also come out with "grants" for first time home buyers. Time will tell. When one program disappears, another surfaces to take its place. Plus, there is action attempting to bring back the DPA programs to which you are referring.

Again - bottom line - start talking to lenders, lots of them. Ask your agent for a list of reputable lenders....unless you can find a house this week?
0 votes Thank Flag Link Mon Sep 1, 2008
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