With lenders getting tighter in their credit requirements, it is more and more difficult for new buyers trying to buy in this "buyer's market". It is doubly hard for those who are well qualified, but are lacking sufficient down payment and closing costs for an FHA loan. The Bush Administration banned down payment assistance programs in July.
Recently, in a last-ditch effort to head off the Oct. 1 ban on the use of seller-funded down-payment assistance with FHA-backed loans, the House Financial Services Committee adopted H.R. 6694, legislation designed to reauthorize and reform that help. This is a compromise bill that would mend rather than end the practice of down payment assistance. It would allow qualified borrowers with credit scores of 680 or above to use seller-funded down-payment assistance on FHA-backed loans. Borrowers with scores between 620-680 will be subject to risk-based pricing and higher insurance premium fees.
But the bill still needs to be approved by Congress and the President. H.R. 6694 is a vote for the next generation of homeowners.
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