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FHA Down Payment Assistance

It is a well known fact that down payments vary in size, ranging from 3 to 20 percent of the home value. FHA down payment assistance program had different options for home buyers. Reliable borrowers could expect FHA to grant them a 4 percent down payment or even less than that. Basically, the program was tailored for first-time home buyers.

It was a common thing that buyers could have their payments covered partially by lending institutions and sellers. Some sellers contributed up to 6 percent of the entire value. However, the 2008 mortgage crisis prompted J. W. Bush administration to ban the seller-funding of FHA assistance. The Housing and Economic Recovery Act was signed by President Bush on July 30, 2008, and it took effect on October 1, 2008.

For the most part, down payment assistance programs were developed in an effort to help first time and low income home buyers have a roof over the head, which has always been a challenge for an ordinary person. People could use a little help of various organizations, who could partially cover the down payment.

In order to join a FHA down payment assistance program and get a loan, a borrower must qualify for that. Because such programs are intended for first-time home buyers, the borrower must prove that he/she is one. Loans are granted to those who have not owned estate property for 3 years or longer. Besides, buyers must be ready for a handful of screening procedures, since lenders must be confident in their clients. Lenders provide all sorts of information on whatever issues borrowers are concerned about, including, but not limited to, current and expected estate market dynamics and the most affordable options available.


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