This week the President signed H.R. 3221, Housing and Economic Recovery Act of 2008, into law. The bill contains a provision (SEC. 2113) which forbids FHA from insuring mortgages in which the borrower’s downpayment comes from a private downpayment assistance provider, beginning October 1, 2008. As of this date, the minimum downpayment will be increased from 3% to 3.5%.
The consequences will be devastating! By FHA’s own estimates, DPA comprises nearly 40% of FHA’s volume. This means more than 300,000 working class families will be locked out of homeownership in the next year alone. Communities across America will take the brunt of the $50 billion in lost real estate sales, not to mention the indirect impact on the real estate, mortgage and building sectors that will be forced to shed tens of thousands of jobs due to this dangerous legislation.
What this means for you and me is that with more properties on the market we will all take a lost in our home value.
I just mentioned a few things that can possibly effect us. Do you feel with this change could help us or hurt us in the long run??
1 response so far ↓
Peggy Sue // August 29, 2008 at 12:32 am
renovation mortgage expert: I think this will definitely hurt us. Major losses in the economy all around. banning downpayment assistance is the opposite of helping the housing crisis. For those who support DPA programs, please visit http://www.dpagroundswell.org to write to your elected official and support DPA Reform HR 6694!
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