On September 16, the House Financial Services Committee approved H.R. 6694 the "FHA Seller-Financed Down Payment Reform and Risk-Based Pricing Authorization Act of 2008' (Whew what a mouthful) Introduced by Rep AL Green (D-TX) will allow seller-funded down payment assistance to continue for certain borrowers only.
H.R. 3221, the Housing and Economic Recovery Act which became law in July 2008, actually prohibits Seller Down payment Assistance which began in October 2008. H.R. 6694 would allow seller-funded down payment assistance for borrowers with credit scores above 619. Borrowers with scores between 620-680 will be required to pay a higher up-front premium (3%) and higher annual premiums (1.25%. Those above 680 will not have to pay the higher fees.
** NAR Washington News Report September 22, 2008
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