Changes this week, courtesy of the housing law
Elements of the housing rescue bill passed this summer went into effect this week. Two you might want to know more about:
* No more seller-funded down payment assistance on FHA-insured mortgages. Buyers could effectively turn FHA into a no-money-down loan by getting the money from nonprofits that in turn got their money from sellers. The law bans this practice. HUD has complained that it leads to more foreclosures, but supporters (including Gaithersburg-based AmeriDream) say it promotes homeownership. They're trying to get the ban overturned.
* A new avenue for borrowers in trouble. To stem foreclosures, the law allows certain homeowners to refinance with FHA if their lender agrees to eat any principal owed beyond 90 percent of the current market value of the house. It's voluntary, which means there's been a lot of debate about how many people this change will end up affecting. HUD, which oversees FHA, has a Q&A here about the HOPE for Homeowners program.