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THE AMERIDREAM DOWNPAYMENT GIFT PROGRAM
HIGHLIGHTS: The AmeriDream Charity, Inc. is a 501(c)(3) non-profit, public charity, which meets the guidelines for the HUD Handbook 4155.1 Rev 4, Section 2-10 for FHA insured loans. To use our program, Buyers must purchase a home enrolled in The AmeriDream Charity downpayment Gift Program and qualify for a mortgage. AmeriDream's downpayment assistance is provided directly to the homebuyer in the form of Gift Funds, which are wired to the Settlement/Closing Agent on the day of the settlement/closing. Buyers must agree to return any Gift Funds they do not use. They must also agree to return the gift funds if the sale does not close on the scheduled settlement date. CASH ASSIST: The AmeriDream Charity, Inc. is designed to provide downpayment assistance to low and moderate income homebuyers who demonstrate the need for financial assistance. The gift will be up to 5% of the home's purchase price (Options: Gold = 5%, Silver = 3%, Bronze = 2%) and can be used for the downpayment and/or closing costs. PRODUCT TYPE: FHA 30-Year Fixed and FHA 1-Year Adjustable Rate Loans. ELIGIBLE PROPERTY: The property may be a single family residence or up to four units, including townhomes and condos. Buyer must intend to occupy home as their primary residence. PREVIOUS OWNERSHIP REQUIREMENTS: None. MAXIMUM LOAN AMOUNT: Maximum FHA mortgage limit. (Currently $173,375 in Johnson, Jackson, Platte and Miami Counties.) MAXIMUM INCOME LIMITS: 80% of the AMI (area median income) based on family size. MINIMUM BORROWER CONTRIBUTION: Down payment and closing costs may come from a qualified gift for FHA loans. CREDIT HISTORY GUIDELINES: FHA loans are not credit score driven and there are no minimum credit scores. Many FHA loans are underwritten through automatic desktop underwriting, Loan Prospector. QUALIFYING RATIOS (Housing Expense / Total Debt Obligations): 35 / 41% CASH RESERVE REQUIREMENTS: None. MORTGAGE INSURANCE: The upfront FHA mortgage insurance of 1.5% of the loan amount is usually financed in the loan. There is also a .5% monthly mortgage insurance premium. If the home is sold and the loan is paid off in the first 5 years, a portion of this upfront fee may be refunded to the buyer. EDUCATION / COUNSELING: Home Buyer Education required. RECAPTURE TAX: None. PARTICIPATING LENDERS: Countrywide Home Mortgage (Jon Platz), First Federal Bank (Ken Harrison), FirstStar (Linda Qurishi), Wells Fargo Home Mortgage (Cindy Laffey) WEB LINK: ameridreamcharity.org QUESTIONS: harrisonk@firstfedbank.com, 816.245.4173, jon_platz@countrywide.com, 913.438.8020, ext. 224, < cynthia.laffey@mortgage.wellsfargo.com, 913.752.4152 CONNIE'S COMMENTS: In theory, this program and other cash assist programs like AmeriDream (CHAPA, Nehemiah, the MHDC Bond, etc.) help first time buyers overcome their biggest obstacle in buying a home… coming up with a downpayment. The challenge in using this program is finding a seller willing to pay up to 6% in AmeriDream fees to sell their home. Of course it is possible to increase the selling price of the home to cover some or all of the AmeriDream fees, effectively allowing the buyer to "finance" his/her downpayment and closing costs, IF THE PROPERTY WILL APPRAISE higher than the original asking price. If the buyer "adds" these costs to the selling price to entice the seller to participate in the program, it may take several years for the actual market value to catch up to the appraised value for the loan, thus the buyer would want to live in the home several years before attempting to sell it. (The costs to sell a home typically range between 8-10% of the home's value.)
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