Nehemiah Down Payment Assistance

Just got an email notice regarding the popular Down Payment Assistance program called Nehemiah.

Dear Colleague,

I am pleased to announce that Nehemiah was victorious in its litigation against HUD!

Judge Lawrence K. Karlton of the United States District Court for the Eastern District of California upheld Nehemiah’s motion for summary judgment. The Court Clerk’s Office is directed to enter judgment and close the case.

To be clear, the U.S. Department of Housing and Urban Development’s (HUD) rule to ban private down payment assistance as proposed in the “Standards for Mortgagor’s Investment in Mortgaged Property” regulation published October 1, 2007, is permanently set aside.

Mary Steinmeyer, Certified Mortgage Lender

This program enables home buyers to ask the seller for a “grant” for their mortgage down payment. The seller grants the down payment to the buyer via the Nehemiah program. Nehemiah charges the seller a fee for then doing the paperwork and passing the down payment along to the buyer.

This is good news for buyers who lack a mortgage down payment. With down payment assistance they may be able to purchase a home.

I say “may” because typically the seller inflated the price of the home to account for this bonus to the buyer. The appraisal becomes the issue if the value of the house cannot be met. In some markets this may be difficult.

Just the same, buyers say a little thank you to Judge Lawrence K. Karlton. If you ever see him on the street, perhaps buy him a beer!