As part of a a $300 billion expansion of Federal Housing Administration loan guarantee programs, Congress decided to raise the minimum down payment requirement for FHA loans and kill seller funded down payment assistance programs. Previously a home buyer needed at least a 3% down payment to purchase a home using an FHA insured loan. Under the new bill, home buyers will have to come up with 3.5%. Clearly not the kind of help that first time home buyers were expecting, these new changes are sure to take at least 30% of first time home buyers out of the market. Most local boards of Realtors already have more mls listings than can be sold anytime soon, so these changes are sure to make it even more difficult to sell a home.
The seller funded down payment assistance is set to end on October 1st so if you are a first time home buyer who can't purchase a home without the aid, you'll want to get busy as you have less than 60 days left.