One important component of the Housing and Economic Recover Act of 2008 that was signed into law on July 31^st provides for the elimination of down payment assistance programs (DPAs).  Why does this matter to sellers as well as buyers?

For most first-time home buyers, saving up enough money for a down payment is very difficult.  Down payment assistance programs (DPAs) solve this problem by allowing a seller to contribute money to a down payment assistance company, a third party, which then provides a legal grant to the home buyer.  According to Homes & Money Quartlerly Newsletter, “For FHA mortgages, which required as little as 3% down, this program has been very popular in the past – an estimated two-thirds of all FHA loans utilized these programs.  Since 2000, that’s nearly 900 families!  Without this program, many buyers qualified to buy a home today will not be able to qualify without the required down payment for FHA loans (which is increasing to 3.5% under the new law).”

What does this mean for sellers?  DPAs create a larger buyer pool, so in essence, if there are more qualified buyers looking to purchase a home, the greater the odds that the home will sell more quickly and for a higher price than if there are fewer qualified buyers.

The elimination of DPAs goes into effect on October 1^st, so if you know anyone who is thinking about using a DPA to purchase a home, now is the time to take advantage of this program.

Also, if you know of someone looking to find a bargain on a home, tell them to check out our weekly Best Buys.

Wishing you sunshine every day and the home of your dreams,
Jeri