First Time Home Buyer Down-Payment Assistance not Likely
It very much appears that the recent HUD website announcement (Mortgagee Letter 9-15) was posted prematurely at best and at worst erroneously. Thus the announcement has been removed from the HUD website and it is currently under further review pending any clarification language that may be posted.
Here is likely why….
In regards to FHA Loans, a borrower can only obtain Monies for their actual down-payment of 3.5% by the following sources:
- Their own funds
- Up to 100% of a gift from a relative/family member
- From Federal, State, and Local governmental agencies and approved nonprofits
- FHA approved non-profits
- Monies from their employer in a form of employee contribution
- Monies from secured borrowed funds E.g.
- borrowing equity from your home to buy another home
- borrowing against your car that is free and clear
- borrowing from your 401-k, etc
Because of this, it is likely that bridge loans may still be available at the closing table for assistance with closing costs and move-in minor repairs such as painting, carpet, appliances, etc. However they will very likely not be made available for down-payment assistance. FHA first time home buyers will be limited to the down-payment assistance options detailed above.
Stay tuned …we will update this story as it develops.