If you're looking to buy or sell a house, you may want to consider using a nonprofit down payment assistance program.
These are programs that provide down payment gifts to homebuyers. Since the down payment is a gift, it does not have to be repaid.
The experts at what's been described as the nation's largest nonprofit down payment gift provider-AmeriDream, Inc.-offer the following tips on choosing a down payment gift provider and applying for a gift.
Be sure you choose a program that has been around for a few years, has a strong reputation, and has developed the technology and infrastructure to create a solid organization that will be there for you at the settlement table and beyond.
Make sure your lender or real estate agent does not get any direct benefit or kickback based on the down payment gift provider that is selected.
Section 8 of The Real Estate Settlement Procedures Act (RESPA) prohibits anyone from giving or accepting a fee, kickback or anything of value-such as a trip-in exchange for referrals of settlement service business involving a federally related mortgage loan.
Look for a program that provides English and Spanish versions of its homebuyer course, and makes this course accessible online. The most reputable down payment gift providers create their own homebuyer education courses that they own and can update constantly.
Look for a program that provides home retention or loss mitigation programs designed to help people stay in the home they buy.
The program should be a 501(c)(3) nonprofit, not a for-profit entity.
People who sell their homes using down payment gift programs typically pay a processing fee to sell their homes. Look for down payment gift programs whose processing fees are low, but that also provide excellent customer service and variety in programs.
Make sure the organization has a phone number you can call, where you can talk to someone who can answer your questions and verify your transaction. The best organizations can be contacted through their Web site, phone number or nationwide representatives.
Once you've chosen a down payment gift provider, tell your lender why you selected this organization. This is important for lenders because recently the Federal Housing Administration announced that it's the lender who is held accountable if the down payment gift doesn't come from a reputable organization.
For more information on The AmeriDream Downpayment Gift Program, or any of their other programs, visit www.ameridream.org.
When choosing a down payment assistance program, be sure to choose one offered by a nonprofit organization.
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