FHA loan changing October 1st 2008?? looking to buy my first house?

Question

I heard that things are going to be changing on October what will be changes going to be? and how will that effect me should I try and buy my house before October 1st?

Answer 1

The changes are that the down payment assistance program will no longer be available thru FHA.  You will need to have a cash downpayment of 3.5% to get into a home.  There are some ways around that tho. Contact a local loan officer to get your particular situation addressed.  everyone is different.

Answer 2

FHA has participated in a  program that allowed a seller to pay your down payment.  Nobody was fooled.  You increased your offer by $3,000 and the seller credited $3,000 back to you.  It was a joke.  That should never have been allowed in the first place. As of October, it is outlawed. You won't miss it.  

FHA loans are the worst loans ( i don't hate FHA; i've gotten several) but they are mostly for people who have bad credit.  /

Answer 3

Some of the other posters are incorrect in their reasoning.

First of all, FHA never provided DIRECT down payment assistance.  They never have.  Other programs such as OWN,  Nehemiah, AmeriDream, Neighborhood Gold, etc, was where the seller would contribute to one of the above mentioned not-for-profit organizations, and then for an application fee, one of these programs would "gift" the down payment to the buyer.

That is how it REALLY worked.  The sellers have never been able to pay the down payment directly to the buyer...never.  Banks have never permitted that nor has FHA.

All of these are going away effective October 1, 2008.

Other changes that will be taking place will be FHA will increase their allowance to 115% of the value of the home...this is to help some folks who are in negative equity situations.  

So yes, if you are going to buy and need Down payment assistance, you literally need to start right now because by the time you find something and get it closed, it will be very, very close to October 1st.

PS:  FHA loans are not designed for people with bad credit, they are also designed for people with no credit or high debt.  FHA has helped thousands of people get into homes that otherwise, never would have been able to.