Nehemiah and Hart (Programs for Buyers)
March 14, 2008
Back in the 1990s, Buyer assistance programs were created as a way to aid buyers who were short of the necessary funds to purchase a home. These programs almost completely disappeared when buyers were able to obtain 100% financing, often by using 20% first trust deed and a 20% second trust deed. Now that buyers must have a down payment and the closing costs, the Nehemiah and Hart programs have resurfaced. In fact, Nehemiah just won a lawsuit against HUD. FHA had prohibited the use of the down payment assistance programs, but the courts ruled that this prohibition was not legal.
HART stands for Housing Action Resource Trust, a California 501(c)(3) non profit and community development organization. As far as I have been able to determine NEHEMIAH is a name for a similar non profit.
These programs require the seller to make a contribution to the non-profit organization - generally in the amount of a down payment or a buyer's closing costs. The non-profit then contributes this amount to the buyer's funds necessary to close a sale transaction.
Often sellers will be reluctant to pay buyer's costs, but in this real estate sales environment, paying a buyer's costs directly or through HART or Nehemiah may be the only way that a seller will be able to sell the property. A buyer may offer the seller a higher sales price as a trade off for paying these costs. This can work in both buyer's and seller's favor provided the property can appraise for the higher price.
If you are a seller, or if you are a buyer, these programs may be worth explore with your lender. I know that our affiliated lender, Financial 2000, has information on these programs.
Back in the 1990s, Buyer assistance programs were created as a way to aid buyers who were short of the necessary funds to purchase a home. These programs almost completely disappeared when buyers were able to obtain 100% financing, often by using 20% first trust deed and a 20% second trust deed. Now that buyers must have a down payment and the closing costs, the Nehemiah and Hart programs have resurfaced. In fact, Nehemiah just won a lawsuit against HUD. FHA had prohibited the use of the down payment assistance programs, but the courts ruled that this prohibition was not legal.
HART stands for Housing Action Resource Trust, a California 501(c)(3) non profit and community development organization. As far as I have been able to determine NEHEMIAH is a name for a similar non profit.
These programs require the seller to make a contribution to the non-profit organization - generally in the amount of a down payment or a buyer's closing costs. The non-profit then contributes this amount to the buyer's funds necessary to close a sale transaction.
Often sellers will be reluctant to pay buyer's costs, but in this real estate sales environment, paying a buyer's costs directly or through HART or Nehemiah may be the only way that a seller will be able to sell the property. A buyer may offer the seller a higher sales price as a trade off for paying these costs. This can work in both buyer's and seller's favor provided the property can appraise for the higher price.
If you are a seller, or if you are a buyer, these programs may be worth explore with your lender. I know that our affiliated lender, Financial 2000, has information on these programs.
posted by shirley harry at 9:19 AM
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