Hud Foreclosed Save
May 1st, 2010
Hud Foreclosed Save
Question: First time home buyer- what is the nehemiah assistance program? Pros and cons?
Also, I heard it was “pointless” to put down less that 20%… why? Is there a mathematical equation to help figure out exactly what our down payment would save us monthly? Also, are there realtors that specialize in HUD or foreclosed homes? If so how do I find one?
Answer: Nehemiah is a non-profit organization that can grant down payment assistance from the seller for a fee. If the FHA will insure a 97% purchase loan for you, the seller can participate in Nehemiahs program and essentially “gift” the 3% down payment to you even though they are not related to you. This is somewhat unique to the FHA programs.
No real Cons. Assume that the seller’s willingness to do this means that they might have otherwise accepted a lower net sales price though. So, if you have the 3% or could get a gift from relatives, you can negotiate a lower sales price.
The real Pro is that if you don’t have the 3% the FHA would require and the FHA is the best program for you, the seller is able to facilitate the purchase.
The less you have to put down on the purchase the better. The primary reason is that your home equity really has a return of zero. It is difficult to access and it is at risk if you fall behind on your payments. On the other hand, if you had your 20% invested it should be growing (your home appreciates whether or not you have a mortgage) and it could be used to make the payments on the loan if you had a temporary disruption in your income (job loss, illness, etc.).
Figure the loan costs about $6-7/per month/per thousand and you can calculate the monthly savings that way (roughly) or use any of the 10 million mortgage calculators on the web.
Call a couple of brokers and ask them if the have any agents who specialize in foreclosures.
HUD also may have a link to registered agents in your area through the marketing reps website:
http://www.hud.gov/homes/index.cfm
Check it out and good luck.
Stop Foreclosure Save Your Home
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