Buying Another Home After Ch13

[spearmint]

To those of you who either gave up your home in Ch13 or are renting (or both) do you have concerns about whether you will be able to buy another home after Ch13? I am wondering, with the income restrictions in Ch13, how ever I can save for a downpayment!!!

What's everyone's thoughts on this?

[optimistic1]

Im not exactly sure about the specifics of how they changed the laws on down payment assistance.

But I can tell you this.

In Decemeber 2004, I was discharged for a Ch.7 BK.

In May 2005, I purchased a brand new car, with 0 down.

In Feb 2007, I obtained FHA financing and paid 0 down for a new home.

So the thought of a BK somehow barring you from buying a house, is a myth, a cruel one at that.

Go for FHA financing, if you qualify, there are some restrictions, but that would the be the way to go before trying conventional loans.

[justbroke]

I was temporarily in that boat. i was lucky enough to change my mind and keep my primary residence after being 4 months into plan (yes four months). I had moved out and into a rental home. I lived there for 4 months before realizing that there was a better plan.

So, as to your question... I thought that I couldn't save for a home because I would have been in a 100% plan, which took all my DMI. No way I could save. So, I was settled on the fact that it may be 2-3 years after my Chapter 13 ended, that I could save enough for a down payment.

Unless you're in a unique position where you have significant income and very low owed to unsecured creditors and arrearages and taxes paid in Plan, I don't see it happening easily.

[optimistic1]

I just checked on the downpayment assistance stuff I spoke about.

Turns out, with great thanks to one of the best presidents in history, Mr. GW Bush.

Elimination of Non Profit Down Payment Assistance

On July 30, 2008, President Bush signed H.R. 3221 - Housing and Economic Recovery Act of 2008. Section 2113 of the bill prohibits seller-funded DPA (Down Payment Assistance) for loans backed by the Federal Housing Administration. Prior to this bill, the seller could contribute up to 6% to the buyer to cover either a down payment or closing costs on an FHA loan. The changes took effect on Oct. 1, 2008.

So, in that respect, looks like you will need to start rolling pennies up.

However,

The way I bought my house, was through a local government grant program, and that law mentioned above, does not necessarily apply. Contact your local Housing Authority to find out more.

The one we used gave us a free grant of 5%, which amounted to about $8000 to help pay for closing and down payment.

The rest was contributed by the seller, which was only $4000 on a $170,000 home.

[justbroke]

Actually, that provision was much needed, but too little too late. What was happening was that the home prices were inflated so that the seller could contribute to the non-recurring charges at closing.

This was another one of the ways many folks received homes they couldn't even make the down payment on.

(Don't get me wrong. I actually liked that people were able to own homes during the 2004-2007/8 run-up. However, we see what happened with lenders encouraging such things as... the 0% down and/or the seller-paid points.)

[optimistic1]

True.

GW Bush should have banned banks from allowing stated income loans, instead of dis-allowing the down payment assistance from the seller. Which I think stated income loans probably don't even exist today.

[spearmint]

I just checked on the downpayment assistance stuff I spoke about.

Turns out, with great thanks to one of the best presidents in history, Mr. GW Bush.

Elimination of Non Profit Down Payment Assistance

On July 30, 2008, President Bush signed H.R. 3221 - Housing and Economic Recovery Act of 2008. Section 2113 of the bill prohibits seller-funded DPA (Down Payment Assistance) for loans backed by the Federal Housing Administration. Prior to this bill, the seller could contribute up to 6% to the buyer to cover either a down payment or closing costs on an FHA loan. The changes took effect on Oct. 1, 2008.

So, in that respect, looks like you will need to start rolling pennies up.

However,

The way I bought my house, was through a local government grant program, and that law mentioned above, does not necessarily apply. Contact your local Housing Authority to find out more.

The one we used gave us a free grant of 5%, which amounted to about $8000 to help pay for closing and down payment.

The rest was contributed by the seller, which was only $4000 on a $170,000 home.

Don't get me started! That "man" should be made to PAY for some of the things he did!

[spearmint]

True.

GW Bush should have banned banks from allowing stated income loans, instead of dis-allowing the down payment assistance from the seller. Which I think stated income loans probably don't even exist today.

Bush's government allowed ALL kinds of subprime activites - the rich profited from the middle class and the poor!

[optimistic1]

LoL, I could go on for days about him, but, part of me thinks all of this happened for some reason beyond our comprehension, some grand master plan for a new world order. I would not be the least bit surprised. Its perfect in theory, because most people like you and me, blame him for all of it, when in reality, it was all planned.

Did you google your local housing authority to see if there is a grant program for down payment assistance?

[StartingOver08]

In our area we have grant programs, but the buyer must still come up with 3.5% of their own money. The grant program will contribute money for the closing costs and for additional downpayment. There are 'strings' on the money. You do not repay as long as you own the house, but if you sell before 30 yrs of ownership you repay a proportinate share back (you pay back 66.67% if you own it for 10 yrs).

There are actually several city and county programs available. Google Affordable Housing Program and your city/county. Or, call a realtor!