FHA Eliminates Seller Funded Down Paypayment Assistance
With the recent passage of the Housing Recover Act of 2008, FHA eliminated all Seller Funded Down Payment Assistance programs. Yesterday they released an additional statement further defining “when”. Here, with a bit of mortgage-speak, is detailed insight:
A Seller or other interested third party cannot participate in a down payment assistance programs on/after October 1, 2008 unless the borrower is approved by September 30, 2008. FHA confirmed the definition of “borrower approved” as follows:
Eligibility will be determined by the following:
- For loans approved through the Automated Underwriting system the “date of the last scoring event” is used. Any resubmission after 9/30/08 will cancel eligibility.
- For manually underwritten loans, eligibility will be determined by the date of underwriter signature. Note: Backdating not allowed.
In addition to the above the FHA appraisal must be completed and underwriter approved by 9/30/08.
Due to this hard deadline make sure your FHA loans utilizing Seller Funded Down Payment Assistance Programs are fully approved on or before 9/30/08.
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