SACRAMENTO, March 13, 1998: In December, Foreclosure Forecast, the Nehemiah Progressive Housing Development Corporation’s Down Payment Assistance Program had received approval from the U.S. Department of Housing and Urban Development (HUD) to go statewide in California.
The program enables homebuyers to pay as little as 1 percent down on a new or resale home and have Nehemiah gift the buyer the rest of the down payment. A non-profit corporation is allowed to do this under the same rules that allow a buyer’s close family members to gift the down payment.
For the last two years Nehemiah has operated this unique program throughout the 23 county Sacramento HUD Region. The program has already helped more than 500 Northern California families become homeowners, assisting with the financing of over $3 million in real estate transactions.
“Our goal is to reach out to people who never thought they could share the dream of home ownership even though they’ve been responsible, hard-working wage earners,” said Don F. Harris, president of the Nehemiah organization.
In issuing the October 1997 letter granting Nehemiah approval to take the program statewide, James R. McClanahan, director of single-family programs in the California state office of HUD, said, “It’s a good program that will help advance President Clinton’s initiative to increase home ownership nationwide.”
Shortly after that announcement, Southern California mortgage brokers flocked to Nehemiah to get approved in promoting their homebuyer assistance programs. Unfortunately, the Santa Ana HUD office refused to insure any loans that utilized the Nehemiah Down Payment Assistance program. Which effectively put an immediate stop to Southern California operations.
Currently, Nehemiah is pushing to get their non profit programs approved nationally in federal court. Until a decision is rendered, Nehemiah has entered into an agreement with HUD allowing them to continue to operate from Bakersfield to the Oregon border.
Buyers who want to participate in the program must earn less than 120 percent of the area’s median income, but make enough money each month to otherwise qualify for an FHA fixed rate, adjustable or 203K loan. The income limits vary by county. For example, in San Francisco County, the maximum income for two people is $61,800; Sacramento, $46,400; Monterey, $43,800 and Fresno, $34,200.
The income limits are higher than most first-time buyer programs and Nehemiah participants do not have to be first-time buyers. They can be move-up buyers or can be buying an investment home as long as it is available to renters. Buyers must also pass a three-hour course on home ownership.
Sellers participating in the program agree to pay a 6 percent service fee to Nehemiah when they accept an offer from a Nehemiah borrower. Since buyers must be credit approved before making an offer, the seller is assured that the buyer qualifies for a loan and has the funds to close. All lenders, real estate agents and escrow officers participating in the program must be Nehemiah approved.
More information on The Nehemiah Down Payment Assistance Program is available by calling Nehemiah’s fax-on-demand line at (916) 444-1578.
