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HR 6694 (Down Payment Assistance)

Here is the resolution that just passed the House Financial Services Committee and is next up for a vote on the house floor.  This could bring back down payment assistance programs.  Here is what the resolution proposes):

H.R. 6694 will reinstate FHA seller down payment assistance for persons with certain credit scores by establishing three classes of eligible borrowers:

  1. Those with FICO scores above 679 will be allowed FHA seller down payments under current HUD guidelines.
  2. Those with FICO scores of 620 through 679 will pay a risk-based mortgage insurance premium to cover their possible defaults in the amount of 3.0% of the original principal for a single premium AND 1.25% of the principal balance as an annual premium.
  3. Those with FICO scores of less than 620 who may be deemed as eligible by HUD for FHA seller down payments will be subject to HUD-established risk-based pricing.

H.R. 6694 will also create an on-time payment incentive based upon a refund of premiums paid in excess of normal premiums if the borrower makes on-time payments for a specific number of years and pays the mortgage obligation in full. If these requirements are met, the borrower will receive a refund in the amount of the difference between the amount normally paid and the amount actually paid.