Nehemiah or builder pays closing costs?

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We are building a new home and qualified for the Nehemiah program, FHA loan with 3% down. I am going to sell some stock and actually put down almost 10%. In order to obtain the Nehemiah 6% closing costs I must liquidate my stock before Sept 26. If not, I can wait to see if stock value increases and the builder (KB Home) will pay 5% towards closing costs. The mortgage advisor says we should just wait because the 5% will cover all closing costs. Not sure what we should do at this point – any suggestions?

3 Comments
  1. Reply
    v b
    May 1, 2011 at 4:32 am

    The Nehemiah style programs were supposed to be shut down as they were deemed borderline illegal in nature.

    The programs worked by INFLATING the cost of your home over and above the fair market value and then having the builder “give” you the same amount as a donation towards your closing costs. When the loan went through for the inflated amount, they got their money back.

    Having the builder pay the closing costs directly is legal, he admits he isn’t getting any more money from you and the paperwork reflects the actual selling price. (Which is better for you in the long run with property taxes.)

  2. Reply
    Mark C
    May 1, 2011 at 4:37 am

    Sell the stock now, look at what happened to Lehman Bro this week, here is the 5 day chart.

    http://finance.yahoo.com/q/bc?s=LEH&t=5d&l=on&z=m&q=l&c=

    Timing the stock market for a few bucks is not worth losing your deal.

  3. Reply
    bianca
    May 1, 2011 at 5:21 am

    You can’t use Nehmiah down payment assistance program with FHA loans no more. Stuck with seller contribiution up to 6% of the purchase price.

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