Maybe you have heard the news, maybe you have not...Seller funded Down Payment Assistance is scheduled to "exit stage left"on October 1st of this year. Depending on your market, you may think this may not affect you. Guess again. This travesty will continue to effect the downward spiral in the housing market for several reasons, including reducing FHA loans by nearly 40% (approximately that many loans or 50,000 families per month), locking out families from homeownership & keeping them in the renting cycle.
As many real estate professionals will tell you, homeownership promotes social stability, financial independence, less crime, a sense of community & personal achievement & many other intangible benefits. The elimination will unfairly target the most vunerable: minorities, first-time homeowners & women-headed households.
Now I know some of you are thinking (but may not say it) - well, they need to save more money for a down payment or their credit should be better. To you I say this: You've been listening to the wrong people. They would have you believe the many (& I mean there's a ton) misconceptions of seller-funded DPA. Nehemiah, Ameridream & other similar DPAs are NOT for dead-beats. They are for credit-worthy borrowers who want to save their reserves instead of spending it all on the down payment. It is not wrong or ill-conceived to want to have a rainy-day fund instead of having $0.00 in the bank, especially in this economy as it stands today. In fact its pretty smart. Most financial savvy people making 6 figures or more have much more in reserves than that. Why should we think those with less to work with should have nothing to fall back on?
Another misconception: "Why should I have people use my tax dollars to buy a house?"Guess what - tax dollars aren't used at all! Seller-funded DPAs, such as Nehemiah, are private non-profit corporations. In fact, more revenue (via taxes) is generated for state & local governments instead of less (or none) for areas that may not have as strong a tax base, thereby increasing value in lower-income communities.
Maybe you still don't buy it. Maybe you've been told, "Oh, so many people foreclose when they get DPA."
Sorry. Wrong Answer. Buy another vowel...
Let's check with the General Accountability Office (GAO) in Washington: "Better than nine out of 10 Americans who purchased their homes with DPA are succeeding in meeting their payments."
Sounds like pretty good numbers to me, Pat. I'd like to solve the puzzle!!
Well, unfortunately, we won't be going to the prize round if Seller-Funded DPA takes a powder.
There will be just less people in the housing market. Those numbers don't sound so good.
If you'd like to help keep DPA go to http://www.getdownpayment.com/ for more on what you can do.
Friday, August 22, 2008
Monday, July 21, 2008
The Nehemiah Program...Getting the Boot???
As I learn more about this industry & profession I have joined , the more encouraging it is to see how many programs & offers of assistance are available to our clients. The Nehemiah Program is one of those programs available to lower to middle income buyers looking for down payment assistance.
From its website, The Nehemiah Program:
Help save a good program by taking action today. Nehemiah has helped hundreds of thousands of buyers who would not have had the money to close on their homes. Link here to find out more on what you can do!
From its website, The Nehemiah Program:
"...serves as a catalyst for economic empowerment and wealth creation byThen, I learn the powers that be (read HUD & the federal government) are looking to eliminate a privately run DPA program. Does this make any sense to you??? Why eliminate a program that uses private funds & instead depend on tax dollars (read you & me & your 1040) to fund public DPA programs. This is absolute nonsense.
expanding opportunities for responsible homeownership, affordable housing and
community revitalization.
To fulfill its Mission and Vision, Nehemiah
Corporation of America has developed a number of programs and affiliate
organizations to serve not just the immediate needs solved by homeownership, but
the longer term needs of urban areas, low- and middle-income families, and their
surrounding neighborhoods. These programs include The Nehemiah Program®,
Nehemiah Community Reinvestment FundTM, Inc. (NCRF), Nehemiah Community
FoundationTM, Inc. (NCF) and Nehemiah Urban Ministry Initiatives (NUMI)."
Help save a good program by taking action today. Nehemiah has helped hundreds of thousands of buyers who would not have had the money to close on their homes. Link here to find out more on what you can do!
Saturday, July 12, 2008
Learning The Ropes - Your Credit Score
What is a credit score?
Before deciding on what terms lenders will offer you on a loan (which they base on the "risk" to them), they want to know two things about you: your ability to pay back the loan, and your willingness to pay back the loan. For the first, they look at your income-to-debt obligation ratio. For your willingness to pay back the loan, they consult your credit score.
The most widely used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. (and they're named after their inventor!). Your FICO score is between 350 (high risk) and 850 (low risk).
Credit scores only consider the information contained in your credit profile. They do not consider your income, savings, down payment amount, or demographic factors like gender, race, nationality or marital status. In fact, the fact they don't consider demographic factors is why they were invented in the first place. "Profiling" was as dirty a word when FICO scores were invented as it is now. Credit scoring was developed as a way to consider only what was relevant to somebody's willingness to repay a loan.
Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores. Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score.
Different portions of your credit history are given different weights. Thirty-five percent of your FICO score is based on your specific payment history. Thirty percent is your current level of indebtedness. Fifteen percent each is the time your open credit has been in use (ten year old accounts are good, six month old ones aren't as good) and types of credit available to you (installment loans such as student loans, car loans, etc. versus revolving and debit accounts like credit cards). Finally, five percent is pursuit of new credit -- credit scores requested.
Your credit report must contain at least one account which has been open for six months or more, and at least one account that has been updated in the past six months for you to get a credit score. This ensures that there is enough information in your report to generate an accurate score. If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage.
Need help with getting started with a mortgage loan or refinance, click here and fill out our loan application to get pre-approved.
Before deciding on what terms lenders will offer you on a loan (which they base on the "risk" to them), they want to know two things about you: your ability to pay back the loan, and your willingness to pay back the loan. For the first, they look at your income-to-debt obligation ratio. For your willingness to pay back the loan, they consult your credit score.
The most widely used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. (and they're named after their inventor!). Your FICO score is between 350 (high risk) and 850 (low risk).
Credit scores only consider the information contained in your credit profile. They do not consider your income, savings, down payment amount, or demographic factors like gender, race, nationality or marital status. In fact, the fact they don't consider demographic factors is why they were invented in the first place. "Profiling" was as dirty a word when FICO scores were invented as it is now. Credit scoring was developed as a way to consider only what was relevant to somebody's willingness to repay a loan.
Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores. Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score.
Different portions of your credit history are given different weights. Thirty-five percent of your FICO score is based on your specific payment history. Thirty percent is your current level of indebtedness. Fifteen percent each is the time your open credit has been in use (ten year old accounts are good, six month old ones aren't as good) and types of credit available to you (installment loans such as student loans, car loans, etc. versus revolving and debit accounts like credit cards). Finally, five percent is pursuit of new credit -- credit scores requested.
Your credit report must contain at least one account which has been open for six months or more, and at least one account that has been updated in the past six months for you to get a credit score. This ensures that there is enough information in your report to generate an accurate score. If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage.
Need help with getting started with a mortgage loan or refinance, click here and fill out our loan application to get pre-approved.
Under Construction...!!
We'll be back soon...check out my profile if you want info on getting your mortgage funded!!!
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