| Page 3 of 3 < |
Down-Payment Spigot to Shut Off
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Their monthly payment is now about the same as what their rent would have been, and Grimsley said they can definitely afford it.
"We just didn't have the cash for the down payment, that's all," she said. "When you rent, it's tough to save up that much money."
Supporters of seller-assisted financing say this option meshes with the FHA's mission to serve low- to moderate-income people. While they acknowledge that the system has problems, they say it should be fixed, not nixed.
To that end, House lawmakers have offered legislation to restore the program but limit it to borrowers with good credit. This bill is likely to languish. Congress will be in session only one more week before election time.
Also, the FHA has said it has "deep reservations" about the measure.
"I'm concerned about the building industry and the effect it will have on new-home sales," said Secretary of Housing and Urban Development Steve Preston. "But we have to understand, this program comes at an enormous cost to the taxpayer."
Many builders hope that a new $7,500 tax credit for first-time home buyers will boost sales and offset any losses related to the demise of seller funding. But many financial analysts are skeptical that this deferred credit, which must be repaid, will appeal to a large number of buyers.
That leaves many builders little choice but to develop other financial incentives for buyers, as Centex said it is trying to do.
"Frankly, it's probably a good thing over the long term" that seller assistance is ending, Cathy R. Smith, Centex's chief financial officer, recently told analysts. It "will probably pressure industry sales in the near term, but over time, our buyers and the market will adjust."
Other builders are playing up the Oct. 1 deadline. At Stratford Club, the Leesburg community built by Toll Brothers, the sales team launched a marketing blitz to notify renters and past customers of the looming cutoff.
"It's created the urgency for people to use it or lose it," said Breneman, the senior project manger.
Staff researchers Madonna Lebling and Lucy Shackelford contributed to this report.
