CALFHA program question

[SD Realtor]

SD Engineer –

I forgot but is there also a silent second on that program as well?

SD Realtor

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[Anonymous]

I found this old post of yours doing research for one of my clients. I can somewhat answer your question. CalFHA loans still seem to be in existance. However, your question was: if you wait, do these programs come back? Yes, I have seen some of them come back or new ones do basically the same function of gettting first time buyers into homes. There is no guarantee, but this is what I have seen so far.

Also, you deserve to be very proud of yourself for taking care of yourself and being ready to buy your first home. There is nothing wrong with zero down. Just please have some money in the bank even if you qualify without it. You need that for emergencies, unexpected repairs and in case you get laid off. It sounds like you don’t have anyone but yourself to bail you out.

By the way, I used a great tax credit program for my brother. It gives you a 15% federal tax credit for your interest payments. In one of my local counties they ran out of funds for this in June, but should have them again in 2009. I understand that it can be combined with FHA. Now I need to find out if it can be used with CalFHA. So here is one example where waiting to buy could help.

By the way, back to your original topic of losing an expiring program, Nehemiah is due to expire in October. (You need to be approved before then, but don’t have to close escrow until after.) However, I have heard talk of it being brought back. Unfortunately, there is no guarantee on that. Also, this is a good, legal program, as long as an honest appraisal shows the value and the seller is willing to work with it. Good luck.

[Anonymous]

I found this old post of yours doing research for one of my clients. I can somewhat answer your question. CalFHA loans still seem to be in existance. However, your question was: if you wait, do these programs come back? Yes, I have seen some of them come back or new ones do basically the same function of gettting first time buyers into homes. There is no guarantee, but this is what I have seen so far.

Also, you deserve to be very proud of yourself for taking care of yourself and being ready to buy your first home. There is nothing wrong with zero down. Just please have some money in the bank even if you qualify without it. You need that for emergencies, unexpected repairs and in case you get laid off. It sounds like you don’t have anyone but yourself to bail you out.

By the way, I used a great tax credit program for my brother. It gives you a 15% federal tax credit for your interest payments. In one of my local counties they ran out of funds for this in June, but should have them again in 2009. I understand that it can be combined with FHA. Now I need to find out if it can be used with CalFHA. So here is one example where waiting to buy could help.

By the way, back to your original topic of losing an expiring program, Nehemiah is due to expire in October. (You need to be approved before then, but don’t have to close escrow until after.) However, I have heard talk of it being brought back. Unfortunately, there is no guarantee on that. Also, this is a good, legal program, as long as an honest appraisal shows the value and the seller is willing to work with it. Good luck.

[Anonymous]

I found this old post of yours doing research for one of my clients. I can somewhat answer your question. CalFHA loans still seem to be in existance. However, your question was: if you wait, do these programs come back? Yes, I have seen some of them come back or new ones do basically the same function of gettting first time buyers into homes. There is no guarantee, but this is what I have seen so far.

Also, you deserve to be very proud of yourself for taking care of yourself and being ready to buy your first home. There is nothing wrong with zero down. Just please have some money in the bank even if you qualify without it. You need that for emergencies, unexpected repairs and in case you get laid off. It sounds like you don’t have anyone but yourself to bail you out.

By the way, I used a great tax credit program for my brother. It gives you a 15% federal tax credit for your interest payments. In one of my local counties they ran out of funds for this in June, but should have them again in 2009. I understand that it can be combined with FHA. Now I need to find out if it can be used with CalFHA. So here is one example where waiting to buy could help.

By the way, back to your original topic of losing an expiring program, Nehemiah is due to expire in October. (You need to be approved before then, but don’t have to close escrow until after.) However, I have heard talk of it being brought back. Unfortunately, there is no guarantee on that. Also, this is a good, legal program, as long as an honest appraisal shows the value and the seller is willing to work with it. Good luck.

[Anonymous]

I found this old post of yours doing research for one of my clients. I can somewhat answer your question. CalFHA loans still seem to be in existance. However, your question was: if you wait, do these programs come back? Yes, I have seen some of them come back or new ones do basically the same function of gettting first time buyers into homes. There is no guarantee, but this is what I have seen so far.

Also, you deserve to be very proud of yourself for taking care of yourself and being ready to buy your first home. There is nothing wrong with zero down. Just please have some money in the bank even if you qualify without it. You need that for emergencies, unexpected repairs and in case you get laid off. It sounds like you don’t have anyone but yourself to bail you out.

By the way, I used a great tax credit program for my brother. It gives you a 15% federal tax credit for your interest payments. In one of my local counties they ran out of funds for this in June, but should have them again in 2009. I understand that it can be combined with FHA. Now I need to find out if it can be used with CalFHA. So here is one example where waiting to buy could help.

By the way, back to your original topic of losing an expiring program, Nehemiah is due to expire in October. (You need to be approved before then, but don’t have to close escrow until after.) However, I have heard talk of it being brought back. Unfortunately, there is no guarantee on that. Also, this is a good, legal program, as long as an honest appraisal shows the value and the seller is willing to work with it. Good luck.

[Anonymous]

I found this old post of yours doing research for one of my clients. I can somewhat answer your question. CalFHA loans still seem to be in existance. However, your question was: if you wait, do these programs come back? Yes, I have seen some of them come back or new ones do basically the same function of gettting first time buyers into homes. There is no guarantee, but this is what I have seen so far.

Also, you deserve to be very proud of yourself for taking care of yourself and being ready to buy your first home. There is nothing wrong with zero down. Just please have some money in the bank even if you qualify without it. You need that for emergencies, unexpected repairs and in case you get laid off. It sounds like you don’t have anyone but yourself to bail you out.

By the way, I used a great tax credit program for my brother. It gives you a 15% federal tax credit for your interest payments. In one of my local counties they ran out of funds for this in June, but should have them again in 2009. I understand that it can be combined with FHA. Now I need to find out if it can be used with CalFHA. So here is one example where waiting to buy could help.

By the way, back to your original topic of losing an expiring program, Nehemiah is due to expire in October. (You need to be approved before then, but don’t have to close escrow until after.) However, I have heard talk of it being brought back. Unfortunately, there is no guarantee on that. Also, this is a good, legal program, as long as an honest appraisal shows the value and the seller is willing to work with it. Good luck.

[Anonymous]

By the way, the 1.5 FHA fee is not negotiable. I wish it was. Also, this amount is due to change in the future. Everyone pays the same amount now. When the change takes effect it will be higher or lower based on down payment and credit score. So if someone has bad credit if might be better to get the loan sooner, rather than later. I am not sure about that. I need to find out what the projected amounts will be.

[Anonymous]

By the way, the 1.5 FHA fee is not negotiable. I wish it was. Also, this amount is due to change in the future. Everyone pays the same amount now. When the change takes effect it will be higher or lower based on down payment and credit score. So if someone has bad credit if might be better to get the loan sooner, rather than later. I am not sure about that. I need to find out what the projected amounts will be.

[Anonymous]

By the way, the 1.5 FHA fee is not negotiable. I wish it was. Also, this amount is due to change in the future. Everyone pays the same amount now. When the change takes effect it will be higher or lower based on down payment and credit score. So if someone has bad credit if might be better to get the loan sooner, rather than later. I am not sure about that. I need to find out what the projected amounts will be.

[Anonymous]

By the way, the 1.5 FHA fee is not negotiable. I wish it was. Also, this amount is due to change in the future. Everyone pays the same amount now. When the change takes effect it will be higher or lower based on down payment and credit score. So if someone has bad credit if might be better to get the loan sooner, rather than later. I am not sure about that. I need to find out what the projected amounts will be.

[Author]

Posts