Question: What is the cost of the home buyer institute class?

Answer: Absolutely nothing!

Question: Can this program be used on any loan?

Answer: Any FHA, Conventional, or Sub-Prime loan that allows a gift from a nonprofit organization can use Down Payment Assistance.


Question: Doesn't this program simply mean the price of a home is raised to cover the funds?

Answer: No. The market value of the home being purchased using our grant is substantiated by an independent appraiser. The appraiser must substantiate the value of the home based on sales of comparable properties. The price of a home cannot be higher than its appraised value.


Question:: Are you FHA-approved?

Answer: FHA does not approve any down payment grant programs; it is the responsibility of lenders to ensure that down payment assistance programs meet official guidelines. In HUD Mortgagee Letter 00-8, dated March 3, 2000, signed by William C. Apgar, Assistant Secretary for Housing-Federal Housing Commissioner, it states: "There has been widespread confusion regarding the Department's role in approving down payment assistance programs in the form of gifts. FHA does not approve down payment assistance programs in the form of gifts administered by charitable organizations. Mortgage lenders are responsible for assuring that the gift to the home buyer from the charitable organization meets the instructions described in HUD Handbook 4155.1, REV-4, Change 1 (e.g. no repayment implied etc.). Thus, while FHA will issue approval letters to nonprofit agencies for their participation as mortgagors, providers of secondary financing, and as purchasers of HUD homes at a discount, such letters are not to be construed as approval of the nonprofit agency's down payment assistance gift programs. FHA will not issue approval letters for down payment assistance gift programs."

Question: Are there any income limitations for potential homeowners?

Answer: Since the lending landscape has changed in recent months some loan programs do limit the income amount of borrowers. However, there are still many programs available that allow any income amount for borrowers.


Question: Is the home buyer grant tax deductible?

Answer: There are two tax deductions to consider: a deduction against capital gains and a charitable deduction. This grant can be a deduction against capital gains. Capital gains are taxed on a primary residence if the gain is 500k or more. Capital gains are always taxed against investment properties. The fee to the seller will reduce the capital gain, as does a fee to a realtor or title company. If a taxable capital gain occurs with the sale of an investment property, then our fee can be deducted as a cost of sale, in the same manner as a Realtor commission or closing costs are. The seller service fee does not qualify for a charitable contribution because the seller is receiving a service in return for the donation, and under IRS rules, the donor may not receive service or goods in return. However, we would encourage you to verify any tax-related questions or concerns with your tax professional.

Question: Who fills out the grant application?

Answer: The loan officer completes the application and submits it for approval. Once approved, a gift letter confirming approval of the funds is sent from The Buyer's Fund, Inc., to the lender. Home builders, home buyers, or sellers who are interested in participating in the program should work closely with their loan officers to take full advantage of this program.


Question: What are the fees involved?

Answer: The only fee involved is a service fee paid by the seller.


Question: Why would a seller pay a fee?

Answer: Typically it can take weeks or even months to sell a home. Most sellers are anxious to sell their home, and they often reduce their price significantly and make other concessions in the process of making a sale. The home buyer grant program allows a seller to substantially increase the pool of potential home buyers interested in buying his or her home from the very beginning. This often means a sale will be made more quickly and, most likely, for the full sales price - all benefits that are well worth the seller participating in the program.


Question: Does a buyer have to repay the funds received through the down payment assistance program?

Answer: No. This is a grant, a bona fide gift that the buyer does not have to repay. The grant is given when the seller agrees to participate in the program by reimbursing the grant amount, plus a service fee, after closing.


Question: Can funds from the program be used to purchase condos, apartments, duplexes, etc.?

Answer: The funds from the program can be used to purchase any residential property.