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I was pre-aproved by FHA AND NEHEMIAH PROGRAM which would help me with my closing cost and down payment.I was told to ask the seller for a 6% back and that would be for closing and down payment cost. my question is IF THE HOUSE IS SELLING FOR 176,500 from this amount the seller will return 6% toward the closing and down payment right, so my balance for mortgage would be 166,500 and for this amount i should get my loan from the bank to purchase the house , i’m I right, because my loan officer is telling me I’m going to be paying a mortgage for the full amount of 176,500, so again my question were is the 6% going if in the loan I’m making of 176,500 in order to get the 6% back from the seller is included in the purchase price. I dont understand this about getting back the 6% from the seller we have to increase the price of the house . the house sales is for 166,500 but in order to get back the 6% i had to increase the purchase price to 176,500 wich gives me back my 6% for closing and down payment. again why do i have to pay a mortgage for 30years in the amount of 176,500 if 10,000 of it is going to be giving to me by seller for my closing and down, please help this is so confusing… i

  1. Reply
    May 30, 2011 at 9:13 pm

    Your question is way too confusing to understand.

    You really need to ask your loan officer these questions. If you don’t understand what he’s telling you, ask him to explain it again until you *do* understand. That’s his *job*.

    I’m reading about the Nehemiah program now, and to tell you the truth, it sounds just the slightest bit unethical. I hope everything works out OK for you.

    Here’s the FAQ I was reading. Maybe it will answer some of your questions:

  2. Reply
    May 30, 2011 at 9:26 pm

    The house was listed for $ 166,500.
    You have little or no savings with which to get into the house. Lending rules don’t allow for the seller to give the buyer money for a down payment…….
    Instead, you are asking the seller to “donate” to Nehemiah (a money laundering company) who will then “give” you a grant of almost as much as what the seller “gave” to them. (see how the money gets laundered?)
    Now the seller isn’t going to do this out of the goodness of his heart. You need to increase the price by the amount that the seller is “donating” to the non-profit money launderer. So you increase the sales price by 6% PLUS the Nehemiah fee (don’t know how much that is…. some charge a flat rate, others a percentage) Now, the sales price jumps up to $ 176,500. Nehemia “gives” you about ten grand to cover the closing costs and down payment. Down payment on an FHA loan will be 2.25% of the $ 176,500, but the FHA up front MIP will almost equal that, so the loan you end up with will be amost $ 176,500.
    The money that Nehemiah will “give” you will get used up in the closing. You won’t actually receive a check for the money.

  3. Reply
    Ed Atun
    May 30, 2011 at 9:37 pm

    People have been so confused and unhappy with Nehemiah that it has been cancelled as of October 1st. It is your money that is being used for the down payment. You are the one who had to pay 6% over the asking price. It’s your money. It is a lousy way to buy a home.
    But if you have no money for a down payment, then you do this or you rent. No other option. /

  4. Reply
    Janet P
    May 30, 2011 at 9:54 pm

    I think where you are confused is with the seller. The seller does not have to agree to this. Most will not.

    They are asking you to buy the house for more so that they have the money in which to pay Nehemiah with.

    This is a round about way to help first time buyers get started without a down payment.

    If you do not wish to finance the additional funds you do not have to use the program, you can go FHA all by itself.

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