For those who are considering a home purchase but do not have funds available for a large down payment time, is running out.

The FHA loan program allows buyers to purchase a home with a minimum down payment of 3% of a home’s purchase price. FHA currently allows the funds for the down payment to be “gifted” from a family member or from a non-profit organization. Sellers are not allowed to contribute towards a buyer’s down payment.

Two of the largest of the non-profit organizations assisting buyers with funds for down payments are Nehemiah and AmeriDream. Sellers make a contribution to the organization, which in turn donates the contributed funds to the buyer to be used as part or all of the required down payment. Nehemiah and AmeriDream have helped hundreds of thousands to become homeowners.

As of October 1, 2008, the New Housing Bill will ban down payment assistance from all non-profit organizations, including Nehemiah and AmeriDream.

FHA offers an excellent loan program for first-time home buyers. A first-time buyer is defined as anyone who has not owned a home within the past three years.

The FHA loan program offers down payments as low as 3% of the purchase price of a property. Most conventional loans are now requiring minimum down payments of 10% – 20%. FHA also offers flexible credit guidelines. Many conventional lenders are requiring that a borrower have a FICO score of no less than 680. FHA also allows a higher debt ratio than most conventional lenders. FHA offers some of the lowest interest rates available to buyers.

All of these factors and the additional benefit of down payment assistance from family or a non-profit organization makes FHA a very attractive loan program. Remember, time is running out for those who need down payment assistance. Your escrow must close by November 30, 2008.

Contact an FHA approved lender for pre-approval and guidelines regarding the Nehemiah or AmeriDream program requirements.