Posted by Mike Stott on August 06, 2002 at 11:11:26:
Greg:
I’ve used this program a few times, however there are better ones than Nehemiah. To name a few: Ameridream; Angels of the Carribbean; and, Affordable Homes for All. The knock on Nehemiah is that they require a separate home inspection. Ameridream & Affordable do not.
The money is easy to obtain because it is your money. Most lenders won’t allow you to directly give the buyer their downpayment. However, some lenders will allow the buyer to obtain assistence from a non-profit downpayment assistence charity program. How most of the programs work is: 1) you give the charity the downpayment plus their servicing fee (3/4 to 1% +/- of the sales price); 2) the charity gives the buyer the downpayment at closing. In the case of Affordable, this all occurs on the HUD. They wire the downpayment to the title company prior to closing and the title company wires back to them the downpayment plus their fee.
I know it sounds backwards, but that’s how it works. On the HUD, it shows as a debit (DP + fee) from your proceeds and a credit (DP only) to the buyer. Again, they won’t allow you to directly give the buyer the funds, but this is acceptable. Go figure.
I write in the contract, as directed by the lender, “subject to the seller contributing X% to a non-profit downpayment assistence charity acceptable to lender”. Check with the lender to see if this works for them.
Yes, I still get an escrow deposit up front from the buyer.
Check with the title companies in your area that are “investor friendly”. They will usually have the contact info for the programs and know which lenders accept them.
Good luck.
Mike Stott