Down Payment Assistance For FHA Mortgages – Is it Going Away, Or Not?
By Spencer Llewellyn
If you have been paying attention to any of the FHA Mortgage news that has been circulating lately then you have probably noticed all of the hype about the ban on Seller Funded Down Payment Assistance (SFDPA) programs as part of the Housing Rescue Bill.
Actually, there is a very good chance that Down Payment Assistance will only end for a very short period (less than one month) because of new legislation that is currently in the U.S. House of Representatives.
The FHA Seller-Financed Down Payment Reform and Risk-Based Pricing Authorization Act of 2008 (U.S. House Resolution 6694), has passed the House Financial Services Committee and is expected to move to the House floor for a full vote this week.
Starting October 1st, Seller Funded Down Payment Assistance (SFDPA) would have been banned as part of the Housing Bill that passed earlier this year.
Now with a change of direction in the House, H.R. 6694 would once again allow Down Payment Assistance programs. This bill is expected to be voted on this week.
HR 6694 allows for Down Payment Assistance to borrowers with 680 credit scores without any adjustments. Persons with credit scores between 620 and 680 would be eligible for Down Payment Assistance but would pay a higher up front mortgage insurance premium.
Individuals with credit scores below 620 would not be eligible for DPA programs. The bill allows for HUD to reevaluate the credit score tiers in 2009 to see if it needs further adjustment.
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Tags: 680 Credit Scores, Down Payment Assistance, fha going away, H.R 6694, Housing Bill, is fha going away, mortgage insurance, Mortgages, Seller Financed, Seller Funded, SSFDPA