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Thread: The American Dream Downpayment Act

  1. #1
    Cyburbian SGB's avatar
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    The American Dream Downpayment Act

    From the Associated Press: Downpayment Aid OK'd for Poor Families

    Find the text and bill status info here.
    All these years the people said he’s actin’ like a kid.
    He did not know he could not fly, so he did.
    - - Guy Clark, "The Cape"

  2. #2
    Cyburbian Rumpy Tunanator's avatar
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    - I hope this doesn't fuel more flight into the suburbs, but increases more reinvestment into the inner cities.

    But knowing the "American Dream", it probally is.
    A guy once told me, "Do not have any attachments, do not have anything in your life you are not willing to walk out on in 30 seconds flat if you spot the heat around the corner."


    Neil McCauley (Robert DeNiro): Heat 1995

  3. #3
    Originally posted by Rumpy Tuna
    - I hope this doesn't fuel more flight into the suburbs, but increases more reinvestment into the inner cities.
    Would be nice if parameters for redevelopment were included in the bill. Then again, why should federal assistance be used to help rebuild old communities when so many programs have helped create new suburbs?

  4. #4
    Cyburbian Rumpy Tunanator's avatar
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    Originally posted by Kathie_WE
    Would be nice if parameters for redevelopment were included in the bill. Then again, why should federal assistance be used to help rebuild old communities when so many programs have helped create new suburbs?
    -It would be nice if there were some parameters for redevelopment and infill projects. The reason the feds should direct the assistance into rebuilding the cities is that if you keep sprawling and creating more suburbs, eventually there will be no open space or farms and forests left.
    A guy once told me, "Do not have any attachments, do not have anything in your life you are not willing to walk out on in 30 seconds flat if you spot the heat around the corner."


    Neil McCauley (Robert DeNiro): Heat 1995

  5. #5
    Cyburbian Seabishop's avatar
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    It would be nice if the federal government focused more on urban redevelopment. However, given this program's stated beneficiaries of low/mod income minorities it would strike some as too close to redlining to offer incentives for urban minorities to stay in their current neighborhoods (not that you're suggesting that). The program as is just offers the assistance - buyers do what they want with it.

  6. #6
    Rumpy --

    I agree with you!!! The later part of my comment was a weak attempt at being sarcastic and an attempt to make an off handed comment about the many federal programs that have aided sprawl!!!

    No more attempts at humor ...

  7. #7
    Unfrozen Caveman Planner mendelman's avatar
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    Downpayment assistance in theory is bad.

    If people need downpayment assistance to purchase a house, will they be able to pay for maintenance of the property?

    I mean, if they cannot save enough for a downpayment (10%), then they probably may not be able to pay for maint of the property, IMHO.

    Make them save the money they need.
    I'm sorry. Is my bias showing?

    Let's not be didactic in this profession, because that is a path to disillusion and irrelevancy.

    Six seasons and a movie!

  8. #8

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    I'm a little more skeptical about this. Homeownership is great and all-but is it a right?

    What if your family earns 49% of the cutoff amount for assistance. You get a nice downpayment assistance package even if you've saved little.

    Versus the harder working family earning 51% that have scrimped and saved for years. You are just over the program cutoff, and YOU don't get a house.

    That's a problem with ALL entitlement programs, but still. Not everyone DESERVES to be a homeowner.

    Am I channeling Rush here, now?

  9. #9
    Unfrozen Caveman Planner mendelman's avatar
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    don't worry BKM about who you are channeling, there is nothing wrong with being fiscally conservative in this instance.

    Some people really need to be much more responsible for themselves.
    I'm sorry. Is my bias showing?

    Let's not be didactic in this profession, because that is a path to disillusion and irrelevancy.

    Six seasons and a movie!

  10. #10
    Cyburbian Rumpy Tunanator's avatar
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    Originally posted by Kathie_WE
    Rumpy --

    I agree with you!!! The later part of my comment was a weak attempt at being sarcastic and an attempt to make an off handed comment about the many federal programs that have aided sprawl!!!

    No more attempts at humor ...
    I know you were being saracastic, I just threw that in there for good measure. And you better keep up the attempts at humor, thats what makes these forums entertianing.
    A guy once told me, "Do not have any attachments, do not have anything in your life you are not willing to walk out on in 30 seconds flat if you spot the heat around the corner."


    Neil McCauley (Robert DeNiro): Heat 1995

  11. #11
    Cyburbian El Feo's avatar
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    This is all just being carved out of HOME monies, which can presently be used for downpayment and closing cost assistance anyway. This would just more or less earmark a certain amount nationally for HO downpayment and closing cost assistance. I think it's a crock, in that it limits flexibility, which is what makes HOME an attractive source of housing dollars in the first place. Your state may need more HO units, mine may need more rental in the stock. This refuses to acknowledge that.

  12. #12
    Cyburbian H's avatar
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    I have a feeling with the aid of this, other similar programs (like Nehemiah) and other current urban investment trends; we will see the reemergence of the classic concentric circles in the US. Low-income families will be lead to the outskirts to be forgotten as the cities gentrify. Does anyone else see this happening?
    "Those who plan do better than those who do not plan, even though they rarely stick to their plan." - Winston Churchill

  13. #13
    Cyburbian Rem's avatar
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    We have the scheme in Australia, though it is not means tested and the grant is $7000 or $14000 depending on income. There is to be an amendment soon excluding house purchases above $1million from receiving the grant. It was introduced just before the federal election before last. It was widely agreed it was an electoral sweetener but popular at the same time.

    Analysis from the economic think tanks is indicating that it has only worked to increase the cost of housing and has not lowered the hurdle for those trying to enter the market for the first time. It would be virtually impossible (politically) to dismantle the scheme now though.

  14. #14
    Cyburbian Mud Princess's avatar
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    Originally posted by mendelman
    Some people really need to be much more responsible for themselves.
    I am all for fiscal responsibility, but let's try to be a little more open minded. Not everyone is able to save thousands of dollars towards downpayment & closing costs... for a multitude of reasons... even if they work hard.

    A friend of mine did benefit from a program that provided a matching grant of $5,000 (matching her savings) towards the downpayment on a home. Her monthly payments are not much more than she was paying for rent, but she would not have been able to purchase a home with this assistance.

    I don't agree that if you can't afford a downpayment, you can't afford monthly maintenance. Some people can do work on their home themselves... others are able to do what's needed over time. There are lots of different circumstances, but a downpayment can be a big chunk of change, IMHO.

  15. #15
    Cyburbian Mud Princess's avatar
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    Originally posted by Mud Princess
    she would not have been able to purchase a home with this assistance.
    Oops - I meant "without" this assistance! That's what I get for not previewing first...

  16. #16
    Member Wulf9's avatar
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    I'm pretty much opposed to all housing subsidies because they add to the cost of housing. Housing prices are usually based on monthly payments. If there is a 10% down payment grant, a person can make the payments for a $180,000 house, but the market price is $200,000. The same thing happens with the tax write offs and the ability to transfer profit from one house to another without paying income taxes. Also, the federally subsidized cheap interest has added a lot to housing costs.

  17. #17
    Cyburbian jordanb's avatar
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    The VA loans issued after the war to only new, single family houses in segragated neighborhoods is credited as one of the major forces in white flight after WWII.

  18. #18
    Cyburbian Mud Princess's avatar
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    Originally posted by Wulf9
    I'm pretty much opposed to all housing subsidies because they add to the cost of housing. Housing prices are usually based on monthly payments. If there is a 10% down payment grant, a person can make the payments for a $180,000 house, but the market price is $200,000.
    Somehow I don't think someone who is eligible for grant assistance is going to be purchasing a $200,000 house...

  19. #19
    Cyburbian H's avatar
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    Originally posted by Mud Princess
    Somehow I don't think someone who is eligible for grant assistance is going to be purchasing a $200,000 house...
    You shouldn’t be so sure. In expensive areas that have high low-income rates (like Miami and Atlanta) families will pair up to purchase a house together. In Atlanta where there are basements, this happens all the time. I know, I helped people purchase this way when I worked for a mortgage lender / real estate broker there. Oh, and it is perfectly legal and within the rules and guidelines of Fannie Mae.
    "Those who plan do better than those who do not plan, even though they rarely stick to their plan." - Winston Churchill

  20. #20
    Cyburbian Rem's avatar
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    The inquiry I mentioned previously (into the Australian 1st home buyers grant scheme) has now uncovered that some recipients of the grant have been very early entrants into the home market. The youngest so far is 18 months.

  21. #21
    Member Wulf9's avatar
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    Originally posted by Mud Princess
    Somehow I don't think someone who is eligible for grant assistance is going to be purchasing a $200,000 house...
    $200,000 is half the median price in our area (It's now $414k median price in Sonoma County).

    That's why so Many Californians are selling their houses and moving to YOUR neighborhood -- driving up house costs nationwide. Say "hi" to your new neighbors from California.

  22. #22
    Cyburbian Mud Princess's avatar
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    Originally posted by Wulf9
    $200,000 is half the median price in our area (It's now $414k median price in Sonoma County).

    That's why so Many Californians are selling their houses and moving to YOUR neighborhood -- driving up house costs nationwide. Say "hi" to your new neighbors from California.
    Not to *my* neighborhood. On the east coast, it's those damn New Yorkers that drive up the housing prices..

  23. #23
    Cyburbian SGB's avatar
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    Originally posted by Mud Princess
    Not to *my* neighborhood. On the east coast, it's those damn New Yorkers that drive up the housing prices..
    Hey, don't you mean those damn downstate New Yorkers?

    Those of us north of Albany tend to drive down housing prices where e'er we go.
    All these years the people said he’s actin’ like a kid.
    He did not know he could not fly, so he did.
    - - Guy Clark, "The Cape"

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