The Genesis Program

[Ramona]

The Genesis Program has been offered to my husband and I to help with the purchase of a home. The information I have read on the Genesis Program says that the money is a gift. The dealer is telling me that the money has to be repaid over the life of the mortgage. I am so confused. Does anyone have any idea exactly what this program or other programs like it really expect? Has anyone ever had any dealings with them? We hope to close in a few weeks, the dealer also says that we should have enough equity from our land to not use the money.
What is the real deal?

Ramona

[rmurray]

This is one of the many "gifted" down payments that the FHA accepts..The FHA requires a 3% verifiable downpayment..plus closing costs run about 6%...

The FHA allows gifted down payments from a non profit charitable corporation such as the one that you mention...but the "charity" requires a "contribution" from the dealer in the amount of 3% PLUS a fee....In this case I think the fee is about $650...(each program has a different fee..from $500 to 1%)..

The FHA also allows the dealer to pay up to 6% of your closing costs...

Where does the dealer get his money from...YOU...If he is going to pay the costs...and use a program..he will raise his best cash price to cover these costs..and you finance them for the term of the loan..In that sense the dealer is right..

Moral of the story...Understand all of the above are costs of the deal..just like the cost of set up..or a/c..You pay them...The more cash you invest...the less you finance..PERIOD..