HUD $100 Program not eliminated by the Housing and Economic Stimulus Act of 2008
(September 11, 2008) -- According to the FHA Resource Center, HUD's $100 down payment program will not be eliminated by the Housing and Economic Stimulus Act of 2008. Contrary to popular belief, "the Act does not eliminate this incentive program from HUD - as long as the purchase contract indicates that it's a $100 down," buyers can proceed with their purchases using the program.
Mortgage industry watchers have not been clear on this point, observing that the law's language eliminates seller contributions to buyers' down payments and establishes a new minimum down payment amount of 3.5% of the purchase price, coming from the buyer or authorized other sources -- but HUD points out that the special $100 down payment program always ran counter to the 3% minimum down payment requirement.
To clarify the issue, 100dollarHUDhomes.com sought written advice from the FHA Resource Center itself to see if the HUD $100 program would be eliminated along with down payment assistance ("DPA") programs such as Nehemiah and Neighborhood Gold, which will no longer be legal after October 1, 2008. HUD reiterated that their $100 down program will remain in effect after that date.