Buyers who wish to buy with no money down had better hurry, because the new Housing Bill signed recently essentially eliminates down payment assistance from the seller on all FHA loans, and Congress added in the bill a provision that the new minimum down payment will now be 3.5%, up from the previous 3%. Financing is getting increasingly harder to get, and underwriting guidelines are changing daily.
We’ve heard of several loans in the Fort Myers and Cape Coral area that were approved by a lender and then pulled a day or two before closing due to changing underwriting conditions. The new changes is making it tougher on buyers and sellers, as well as anybody in the industry. Brett Ellis recently did a news story on the changing financing conditions.
Buyers who buy now will also receive a $7,500 tax credit on their tax bill as long as they fall within income guidelines, which are $75,000 for an individual and $150,000 for a married couple. Buyers will receive slightly less if they make more than these amounts up to $90,000 for a single person and $180,000 for a married couple. This is an interest free loan and does not have be repaid unless the borrower sells the home within 15 years, in which case $500/yr comes off the tax bill for every year they owned the home.
So there is much incentive for buyers to purchase now, and even more if the buyer needs a zero down loan. These buyers need to buy and close before October 1, 2008 or they will need a down payment. There may be some specific bond programs available after October 1, but that money goes fast and eligibility requirements are more stringent.
We’ll report on more of the provisions of the latest housing bill in upcoming days, so stay tuned.