Responsible Home Ownership
Since President Bush signed the Housing and Economic Recovery Act of 2008 on July 30, 2008, many federally established down payment assistance programs have been cancelled. The Act prohibits seller-funded Down Payment Assistance for loans backed by the Federal Housing Administration. The details of this program are presented for reference only.
About the Program
The Responsible Home Ownership program was operated the non-profit Community Housing and Development Corp. The program offered down payment assistance specifically to low-income individuals who had steady income and good credit. Home buyers qualified for this program if:- They met low-income criteria.
- They were pre-qualified for an FHA home loan, or were approved for an FHA loan.
- They wanted to buy a home in the United States.
- The seller participated in the program.
To participate, a seller was required to sign the "Participating Home Agreement." Loan officers and/or realtors helped buyers learn how to get sellers into the program. Funds from this program could be used for both closing costs and down payments.
The Responsible Home Ownership down payment assistance program was different than other programs because it was not limited to owner-occupied single family residences. This program allowed down payment assistance for multi-family homes or commercial purchases. Some of the terms of this down payment assistance program fell outside the bounds of what you are permitted to buy with an FHA loan.
Down payment assistance programs required the seller to pay a fee to participate. The fee was considered a payment for services rendered and not a tax-deductible charitable contribution.
Down payment assistance and first-time homebuyer programs have expanded and are offered today by state, city, and municipal governments throughout the country. A curated list of down payment assistance programs is available courtesy of FHA.com.
Ask your loan officer for recommendations on down payment assistance programs, or how to make an offer contingent on the use these program.
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