Use Them or Lose Them - Down Payment Assistance Programs to Be Eliminated
The recently passed Housing and Economic Recovery Act of 2008 (H.R. 3221), was presented to the public as legislation that would assist homeowners facing foreclosure and make home purchases more accessible to potential home buyers. How successful the new law is in these areas is highly debatable. Here are some things you need to know about this legislation:
- Down payment assistance programs, such as AmeriDream and Nehemiah Corporation of America, will go the way of the Dodo on October 1, 2008. What does this mean for the Rutherford County real estate market?
- If you want to be a buyer and don't have a down payment of at least 3.5%, you really need to get a home purchase under contract before October 1st or start saving your money for a down payment. There are still a few 100% financing programs still available, but relatively few borrowers qualify for them and purchasing with down payment assistance before October 1st is still your best chance to get into a home with little or nothing down.
- If you've been thinking about selling your home, especially if your listing price will be at $150,000 or below, you need to get your home on the market ASAP. After October 1st, when the down payment assistance programs go away, we estimate 15-20 percent of potential buyers will be eliminated from the marketplace. We expect a flurry of activity between now and October 1st as cash-poor buyers scramble to purchase something before the October 1 deadline.
- Only about 400,000 mortgage holders qualify to be helped by the foreclosure relief provisions of the act. Click here to find out if you are eligible. Just be aware that this assistance comes with strings attached. If you qualify, make sure you fully understand what you're getting into before signing up for this program.
- First time home buyers (defined by the law as anyone who has not owned a home in the last three years) get up to $7,500 through what the legislation calls a "tax credit". However, it is more like an interest-free loan as the money must be paid back to Uncle Sam over the next 15 years.
If you want to buy or sell your home, the Jones Team would love the opportunity to help you. We sell more real estate than any agent or team in Rutherford County. We have a proven track record of success and we can get the job done for you!