Downpayment gift... or payment assistance

Discussion in 'Homesteading Questions' started by AngieM2, Dec 22, 2003.

  1. AngieM2

    AngieM2 Big Front Porch advocate Supporter

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    Folks - I've come across this site, and am investigating it... but just have logged on and been looking around.

    It sure looks as if it might be a big help to some of us here.

    https://www.ameridream.org/

    If it is legitimate, I may be trying it.... Cause I cannot stop paying on what I'm in long enough for a downpayment, but can make monthly payments - and I bet I'm not the only one here in that situation.

    Hope this helps someone, and really hope it can help me some.

    AngieM2
     
  2. RAC

    RAC Guest

    My browser wouldn't immediately connect to your link, said "the website certificate was signed by an unknown certifying authority", and warned that it might be an impostor site. I have never seen that warning before with any other site I have visited, so I think I will heed the browser's advice and not go there.

    What I have seen as the latest "solution" is just rolling the downpayment into the main mortgage, or essentially a second mortgage, and of course, at higher interest rates.

    You might be better off at looking for a seller who is willing to take mortgage payments every month (say as steady retirement income instead of needing to cash out to buy another property) instead.
     

  3. RAC

    RAC Guest

    I think there's an "s" next to the "http" that needs to be removed from the link for it to work properly.
     
  4. CraftyDiva

    CraftyDiva Is anybody here?

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    Check your local County Office, some have assitance programs funded by federal grants. Depending on income it may also help with closing costs. There some programs that will also forgive the loan after you've lived in the home for a period of time usually 3/5 years.
     
  5. RAC

    RAC Guest

    I looked at some other sites with the same name in the title, and it seems to be one of those programs that help with financing if you are willing to move in to neighborhoods that need improving (redevelopment)--which may or may not be for you. Some big cities have used similar programs to attract teachers and police to live closer to where they work.
     
  6. Jena

    Jena Well-Known Member

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    I have a house I would love to sell. I gave up on trying over a year ago.

    After reading their literature, there's no way I would enroll my house in that program. Basically, I, as the seller, would be paying MORE than what they give the buyer towards a down payment. What good would that do for me? I may as well agree to a lesser down payment, or lower my price.

    Their seller agreement also says that I have to accept ANY loan, with any terms that will allow the buyer to use their program. That is a pretty scary thing...letting acceptance of this program be the deciding factor in the financing. I could find myself paying all closing costs, etc.

    With all that being said...it would be interesting to see what, if any, properties are enrolled in this thing.

    I also wonder how a program, that is supposed to pay all this money for down payments, ends up giving money to other charities. Shouldn't all those funds go towards more down payments for others? If I were that charitable, I might go for it, if I knew the "service fee" I pay for my buyer, turns into the next buyer's down payment, but if they give it to some charity...heck, I can do that myself!

    I smell a rat.

    Jena
     
  7. AngieM2

    AngieM2 Big Front Porch advocate Supporter

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    Okay folks -

    That's one nice thing about posting something like this here. The holes and dangers will be found out in just an hour or two.....

    But this internet might be an instrument to help find and fill the dream....

    Angie
     
  8. RAC

    RAC Guest

  9. gccrook

    gccrook Well-Known Member

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    This looks like the system used by the buyer of our home. It is strange, but worked well for him and for us. We (the seller) simply agreed to make a donation in the amount of the downpayment to the organization, and they gave that to the buyer for his downpaymet. To do this, we (seller and buyer) simply agreed to a higher selling price which included this amount. So, it does essentially roll the downpayment into the mortgage, but it helps someone who does not have enough set aside for a downpayment. It is apparently legitimate.
     
  10. mikell

    mikell Well-Known Member

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    Look into getting a construction loan to buy a place or finance the downpayment with the owner. The owner will cash out all except the downpayment amount that you owe. I use it alot.

    mikell
     
  11. marisal

    marisal Well-Known Member

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    Thats what we did to buy our house.It cost us(the buyer) $350 dollars, up front, and they took care of everything else. The seller gave $6000 or so to this "Charity" Which gave it back to us to pay the closing costs. We got about $2000 cash at signing, thats what was left over. which was nice, cause we needed to do a few things to the house before we moved in. It did roll into our mortgage, but we didn't have the money for the down payment, so it worked out for us.

    I don't know what the exact name of the program that we were in is, our Realtor took care of all that. That was 3 years ago.

    One Of my friends did it too, to buy there house.

    ~Marisa :)
     
  12. RAC

    RAC Guest

    So it in effect artificially raises home prices in an area, translating to higher property taxes, and hurts everyone else in states where they reassess property values every so often (as opposed to say California, where your assessment is more or less frozen at what you bought it for, except for like a 2% increase per year). That program should be outlawed--it isn't a charity by any stretch of the imagination.
     
  13. AngieM2

    AngieM2 Big Front Porch advocate Supporter

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    RAC - I thought property taxes were on assessed value, not sold for value. I may be wrong, or it may be just for my state.

    And I checked with someone in the real estate closing business today, and it does work here - the seller pays company about 3.5 % and company pays 3% for downpayment. And there is one other company my source knew of, and another who's name she could not remember.

    I do want to say, I only posted this, as there are a lot of people who are trying to find a way to get their land, etc. It was as a help to others, a possible way. But some people only see bad, and only see what they think may effect them.

    Maybe next time I find something that MAY help someone here, I'll just keep it to myself.

    I'm at least trying to figure out a way, and if I do - I was going to try to share it.

    Good luck to the other searchers.
    and Merry Christmas, be sure to look out for yourself.

    Angie
     
  14. june02bug

    june02bug Well-Known Member

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    We did that also. The seller (buys and sells as a hobby) donated an amount to the charity and they in turn gave it to us... worked great. Our seller was wonderful, he just likes helping people. He also knocked 9,000 off of his asking price because he liked us and I told him he was asking that much more than we wanted to pay for a place. We had only $500 out-of-pocket for appraisal, credit check, and some little ($25) fee for the title company. Seller paid everything else. We could probably sell it now for more than we are paying and we just closed the 4th. (not in the city but not to far away for our commute either... 5 rural acres) :D


    RAC - I thought property taxes were on assessed value, not sold for value. I may be wrong, or it may be just for my state.
    Same here. Properties always sell for more than they are taxed at here, unless something is seriously wrong with it or it is sold to family or something. Taxes are based on an assesed value here but they do change with government whim. :rolleyes: Bare land here tends to sell for about double what it is being taxed at ... but then again I'm in Florida. BTW they use replacement costs here usually. All of the appraisals I've seen anyway.. and I see a lot.
     
  15. RAC

    RAC Guest

    Angie, you misunderstood what I was trying to say. Sorry about that. One important element of "charity" is the giving up aspect. It seems here that the seller actually doesn't lose anything--they get their price on a house that on the open market should have sold for less (and maybe therefore making it within the reach of that buyer). I also wonder how much the head of this corporation makes in salary and benefits.

    In most states, assessed value is always based in some way on market value, because it is the easiest and quickest way to appraise value--how much are you willing to pay for this property on the open market. Much easier than to calculate how much replacement cost would be, for example, which is another way to appraise property. Or just going by square footage.

    California is one that is pretty straightforward about it. Two houses in the same neighborhood will pay vastly different amounts in taxes because one party moved in 30 years ago and the other party moved in last week. Is that fair? Well, at least you know how much it will be and your assessed value isn't going up $50,000 in one year because someone put something in next door a week ago. Other states will start with what you paid for a property, then go and reassess every year to supposedly even out the tax burden, but that can result in sudden huge tax bills when you've done nothing to your house. And your income doesn't magically go up to cover these higher taxes, not to mention any bonds and levies that are calculated based on assessed value.

    I am not against charity per se or homebuying programs, but someone else's charity should not penalize others not involved, and this in a way does. That is what I object to, the method that is being used here.
     
  16. AngieM2

    AngieM2 Big Front Porch advocate Supporter

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    RAC - I'm glad this is a misunderstanding.
    And I apologize for getting snippy, but I get so fustrated.

    When paying for a place to live, there is not money to save (or not much) for a decent downpayment. But I can make payments and have a history of doing so.
    also, not great credit history, have worked on it - got it better. But just found out something I paid off about 5 years ago, still reports it each year as a payoff, so won't disappear, and it pulls down rating.

    This way of doing the downpayment, may be the only way I can figure out how to get a place of my own. Right now purchasing a mobile home, and having it on someone else's lot, does not get any equity or improve my position. And I really need to know I'm building equity for my future.

    So to anyone else who creatively financed, or knows of programs that may be applicable in n. Alabama or very S. Tennessee (areas that I find acceptable places and can still get to work), then I sure would be interested in HOW.

    thanks Angie (and maybe we'll help a lurker or two also.)
     
  17. Jena

    Jena Well-Known Member

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    I'm sort of with RAC on this one. I'm not against the program, per se, but I am definitely against them calling themselves charities. They are not. The amount paid by the seller is not even deductible (according to the Ameridream site).

    Someone is making money off this under what I would call false pretenses. There is nothing at all charitable about this deal. I don't know what they should call themselves, but a charity ain't it!

    As far as taxes go....assessed values are directly tied to market values. California is an exception and I really miss knowing what my taxes would be year to year. I paid over $10,000 in property taxes last year, in two states. They WILL go up this year. If property values go up significantly, so will my taxes. If everyone signed up for this thing and bumped their prices up by 5% to cover it, taxes would increase!

    It seems like there would be a different way to market this program that would be more honest and also not result in higher property values.

    Jena
     
  18. This is how I sold my first country house, I paid the down payment and added it on to the price.
     
  19. RAC

    RAC Guest

    Angie, I understand how you feel. I think that with what you said, you might be better off looking for a For Sale By Owner with an owner who owns their house outright--this allows them a lot more leeway in terms of financing. For example, just as they have 10 year mortgages, you could negotiate for a 35-year mortgage (of course, with no prepayment penalty when your circumstances improve). You do not want any 5-year balloon mortgages, because you are only paying interest for the 5 years and building no equity. And, who knows how high the interest rates will be when the 5 years are up and you must refinance. Not everyone who sells a house wants all of their money out of it at once--many are more interested in a monthly income stream.

    To find sellers like this who would be willing to work with you you might try putting a notice in your church bulletin, or at your child's school or even in the paper.

    Also "Lease with option to buy" could work for you too.
     
  20. marisal

    marisal Well-Known Member

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    Ours must have been a different program then them because it WAS tax deductable for the sellers. Also, our property taxes are not based on how much we paid for the house.

    ~Marisa