FHA Downpayment Alternatives

Unless the next Congress makes a major change, Downpayment Assistance Programs are a thing of the past.  We have been looking for Alternatives, and found this program that started in May of 2006 by the Rainy Day Foundation.

How does the Punctual Payment Program work?

The program is designed to help strengthen “Loan Borrowing Potential,” the website says they are providing a “Worry Free Loan.”

FHA loans now require a 3% down payment, at the beginning of 2009, it goes to 3.5%.  If the client does not have the funds for a down payment, FHA allows a gift from “Family or Friends.” 

With the recent economic downturn, Family and Friends might not be willing (or able frankly) to just “Gift” the downpayment for a home.

The Punctual Payment Program allows you to enroll in their re-imbursement program, for a fee of $499, and it will repay your “Giftor” back in 4-6 months.

How the Program Works

• The Borrower is rewarded for On Time Payments. 
• The Seller can contribute up to 3%.
• The seller’s contribution to be reimbursed will go into an Escrow account maintained by the Rainy Day Foundation.
• Seller or borrower can pay for the $499 fee (just like Down Payment Assistance Programs of the past)
   

The Advantages of the program

• 1 yr job loss coverage (benefit of $499 fee) – Event of loss job, coverage will be up to $1,800 per month for up to 6 months.
• Pre-Purchase counseling
• Post-Purchase Counseling
• Missed Payment Protection – For as long as the borrower is enrolled the program will pay the loan servicer ANY MISSED payments.
• The SELLER can contribute up to 3%!

One of the reasons Down Payment Assistance Programs “went away,” was because HUD said the borrowers were going into default at an alarming rate.  With this program, there have been ZERO payment defaults in the first 12 months of ownership – ever!

If you are interested in this program, please call us!