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HOME Consortium Down Payment Assistance

The HOME Consortium home ownership assistance program helps families afford a home of their own by providing deferred loans. The DOWN PAYMENT ASSISTANCE LOAN (DPA)program provides eligible home buyers with a forgivable loan of up to $5,000 to be used for down payment and/or closing costs. Funds are for buyers purchasing in Waukesha, Jefferson, Washington or Ozaukee counties.

The program is funded by the HOME Consortium’s annual allocation of funds provided through the U.S. Department of Housing and Urban Development. Eligible homebuyers must reserve funds through a participating lender of their choice who will receive a loan commitment from the HOME Consortium program administrator.

DPA loan is provided as a five-year forgivable loan, meaning that as long as the property remains the borrower’s primary residence for five years the loan is forgiven and no repayment is due. If the property is sold, title is transferred, ceases to be the primary residence, or there is a cash out refinance a partial repayment of the loan would be required. The loan is forgiven 20% for each full year. The HOME Consortium down payment forgivable loan may be combined with other down payment assistance programs available through the state, Federal Home Loan Bank, HUD or other personal or non-personal sources.

For additional information on maximum purchase price limits and eligibility please visit their site at:

http://www.homeconsortium.info/home/home-ownership-assistance/

Need help finding the perfect home? We would love to help! Take a moment to fill out the home buyer questionnaire below:

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Do you have a client walking the fine line between foreclosure and a short sale? They may have several questions regarding their predicament that you might not know the best way to answer. The good news is that’s what we are here for! We have compiled a few key points that should be made to a wavering client regarding their decision to short sale or not.

First, let’s start with the definition of a short sale:

In simple terms, a short sale is a graceful exit from an underwater mortgage. The lender will agree to sell the home for less than what is owed on the mortgage.

Secondly, what are the perceived advantages of a short sale?

1. Credit - If a homeowner decides to short sale instead of foreclose, they can become a homeowner again far quicker.  In fact, updated Fannie Mae guidelines assist homeowners in qualifying for loans just 2 years after their short sale. If a foreclosure is on record, it could take as long as 7 years to purchase again.
2. Short sellers could obtain additional time in the property - During a short sale, the homeowner could have more time to plan for what’s to come. Since the average short sale takes between 60-90 days, there isn’t a rush to immediately find a new residence. With a foreclosure, you could have as little as 30 days.
3. Short Sale Cash at closing / Relocation Assistance – There are many updated government short sale programs available and designed to assist the homeowner in need. Bank of America has recently begun to offer pre-approved homeowners up to $30,000 in assistance. We’ve also had Chase and CITI offer homeowners $12,000 - $30,000 as a cash incentive to the homeowner short selling their property. There is also the HAFA (Home Affordable Foreclosure Alternatives) program that is there to assist qualified homeowners with a relocation assistance of up to $3,000.
4. Mortgage Debt Forgiveness Act– There is the Debt Forgiveness Act of 2007 which may forgive the homeowners of paying the taxes associated with the cancelled debt of selling the property short. This is a question for a Certified Public Accountant.  Click here to see the Mortgage Debt Relief Act of 2007 as described by the Internal Revenue Service (IRS)

Lastly, what could be the perceived disadvantages of a short sale?

1. Credit - If a homeowner decides to take the route of a short sale, their credit score may be impacted due to the late mortgage payments and/or the reporting of the account being paid in less than full. However, it typically won’t be impacted nearly as much as a foreclosure.
2. Mortgage Debt Tax Liability – The seller may be responsible for additional taxes if they choose to short sell. If the lender agrees to the short sale, there may be a liability to pay taxes on the debt forgiven. It is important to speak with a tax attorney or professional regarding this matter.
3. Deficiency Judgments - In some states, the lender may be able to come after the homeowner for the deficiency amount.  In the state of California, for instance, there are Senate Bills that protect California homeowners who decide to short sale their property.  (Senate Bill 931 and Senate Bill 458). Again, it is important to speak with a tax attorney or professional regarding this matter.

At Short Sale Experts INC, we can answer these questions (minus the specific legal or tax questions) plus many more! We are here to help – our name says it all!

888-SHORT-20

Too often, many homeowners doing a short sale read up on the internet and speak to friends, coworkers, relatives and anyone else whose done a short sale, about how they received $3000 relocation assistance by doing a HAFA short sale.

Sadly...this is NOT always the case. Simply going into the HAFA short sale program here in CA does NOT guarantee you will walk away with money.

Case in point.....First your realtor needs to determine if your servicer(the one you normally make or made your mortgage payments to for your 1st lien)participates in the HAFA program. Many servicers DO NOT!.

Also, even if your servicer(1st mortgage lienholder) participates in HAFA, the INVESTOR who is above your servicer and has final say so...may NOT be a HAFA participant.

Many 1st mortgage liens are SOLD to a private investor or group of investors that DO NOT belong to HAFA, nor do they have to abide by HAFA's guidelines and rules. 

OK, so let's say your 1st lien holder and their investor DO participate in HAFA and allow you to do a HAFA short sale.

If you have a 2nd lien, you need to also find out if THEY participate in HAFA...for if they DON'T...then guess what may happen when you go to close? Your 2nd lien holder could see the $3000 monies awarded to the seller(YOU) by the 1st lienholder and decide to GRAB or TAKE any monies on the table. Thereby preventing YOU, the homeowner from getting ANY MONIES awarded to you. Don't say NO...because I've seen it done.

Also...here's the kicker....and even better than the above. Let's say..Mr and Mrs Seller had a 1st and a 2nd on their home, and the 1st even agrees to a HAFA short sale, and so does their investor.And let's say your 2nd lien servicer WAS a participant in HAFA and agreed to participate. *  If your 2nd in this process gets SOLD OFF or CHARGED OFF during this process to a collection co. for x amount of months of NON PAYMENT on your part, then that COLLECTION co is NOT HELD to HAFA's rules and can collect the relocation monies at funding. The collection companies ARE NOT SERVICERS...and therefore they DO NOT belong or partipate in HAFA's rules or programs...so  since they are a collection company..they can TAKE the monies left on the table. Remember people...they are a COLLECTION company...they don't call them a collection company for nothing!!!!

Remember the 2nd lien holder, whether it be a servicer or now a collection co...has begrudgingly accepted what the 1st will give them, and they are NOT happy.

Please make sure when doing a short sale that you interview an agent who has done them extensively and has much experience in negotiating short sales. Please don't assume EVER that because an agent has these CDPE or SFR designations...that they KNOW or are VERSED in NEGOTIATING short sales. These companies handing out designations are PRIVATE COMPANIES charging realtors a $500 or more fee to take a 1 day or sometimes just a several hour course in short sales. THIS DOES NOT mean your realtor knows in the slightest how to navigate and negotiate the slippery slope of short sales. Many of these realtors who have gotten their licenses not that long ago or get these designations because they know that 50% of the market is upside down and if they want ANY business, they better get with the program and start handling short sales.

I am not knocking these designations....there are agents who have them and legally have experience and know how to handle short sales... the main thing is to check for experience in how many short sales they have done...and if they have DONE it themselves. Farming it out to 3rd party negotiators or attorneys, does NOT guarantee success.

Please ask many questions about the short sale process and scenarios. There is no magic wand that anyone can wave to make sure your short sale goes smoothly, for many things occur as roadblocks to navigate along the way. But with a strong negotiating agent who is familiar with all the ins and outs and possible scenarios that the banks, lenders, servicers, investors,and collection agencies throw our way....hopefully having this extensive knowledge and experience can help you obtain a successful outcome.

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