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The Nehemiah Program
More than 163,000 families now own homes, thanks to The Nehemiah Program. Although, in my opinion, it is not for everyone, The Nehemiah Program can help you achieve the American dream: A qualified Homebuyer using an eligible loan program, such as an FHA, can move into a new home with "zero cash" or "minimal" out of pocket expenses. The Nehemiah Program means most families and individuals will have an opportunity to enjoy home ownership. Frequently Asked Questions 1. What is The Nehemiah Program? The Nehemiah Program provides gift funds for downpayment and closing costs to qualified Homebuyers using an eligible loan program, such as FHA or a conventional loan that allows gifts from charitable organizations. Gift Funds from 1% to 6% of the final contract sales price can be received, depending on the particular needs of the Homebuyer. 2. Can The Nehemiah Program be used to help payoff a Homebuyer's debt as well as for down payment? No, Nehemiah gift funds may not be used to payoff homebuyer debt. According to HUD guidelines, gift funds cannot be used to pay off Homebuyers' consumer debt. Gift monies can be used to pay downpayment and closing costs. 3. What is a Nehemiah Participating Property? Any residential property can be purchased using the Nehemiah Program as long as the Seller agrees to the Nehemiah participation requirements. Both new and existing homes can be purchased. In exchange for helping the Seller find a qualified Homebuyer, the Seller agrees to make a contribution to Nehemiah of 1% to 6% of the final contract sales price, plus pay a participation service fee of $500.00 to $750.00. 4. Doesn't the Seller basically pay the Homebuyer's down payment? No, the contribution paid by the Seller is not used for downpayment assistance for the Buyer of their home. Nehemiah provides the gift funds to the Buyer from a pre-existing pool of funds, and wires it to the Title Company prior to the loan closing. The Seller pays a contribution and service fee to Nehemiah only after the loan has successfully closed. The contribution collected from the Seller replenishes Nehemiah's pool of funds for other gifts to be used for future Homebuyers. 5. Are there any program restrictions for Homebuyers? There are NO income, asset, or geographical restrictions. And, the program is not restricted to only First-time Homebuyers. The Nehemiah Program's only requirement is that the Homebuyer who receives the gift funds will be the primary occupant of the property. 6. Is the contribution that the Seller pays to Nehemiah considered a charitable donation for tax purposes? No, the Seller contribution that is paid to Nehemiah is not tax deductible as a charitable contribution because the Seller derives the full benefit of the contribution through the sale of a home. However, this contribution may be tax deductible as a cost of sale, similar to that of a sales commission. Nehemiah recommends that Sellers contact their personal tax advisor for questions regarding tax deductibility. 7. How can Nehemiah afford to give away money? They have a pool of funds that comes from contributions and processing fees that are paid by Sellers who use the program. 8. How can it be a gift when the Seller increases the sales price of the home? It is a gift because it meets the definition required of a monetary gift established by FHA guidelines and/or conventional loan programs that allow gifts from third-party charitable organizations that are helping advance home ownership. The sales price of the home must always be supported by an appraisal. If you have any questions or concerns regarding the sales price of the home or a home qualifying for the program, please contact Brady Pierce at (435) 787-8351. 9. Can any REALTOR utilize The Nehemiah Program, and what properties can be sold to Homebuyers? Any REALTOR can use The Nehemiah Program. There are no enrollment or registration requirements. Properties sold to Homebuyers are financed with a mortgage loan that allows monetary gifts from a charitable organization. Typically the mortgage loan is an FHA loan product. 10. Why and how do Sellers agree to make their homes Nehemiah Participating Properties? The Nehemiah Program makes homeownership available to a larger pool of Homebuyers in every market. Being able to market listings, as "Free Gift Money Available - Zero Total Cash Can Moves You In" greatly increases the exposure of a property. Sellers benefit with more qualified showings from pre-approved prospects. This usually results in a faster sale. 11. Can any Lender utilize The Nehemiah Program? Yes, most Lenders can use The Nehemiah Program. There are no enrollment or registration requirements. Lenders must use a loan program that allows gift monies to be given from a charitable organization. Typically, the mortgage loan is an FHA loan that allows gifts from charitable organizations. However, in my opinion, you want to make sure that your Lender has previously used the program so that your experience is pleasant. Some Lenders, such as Zions Bank, have opted to make The Nehemiah Program unavailable to Buyers. 12. Do Nehemiah transactions take longer to close? No, Nehemiah transactions do not take longer to close. Lenders process and underwrite the loan the same way regardless of the source of gift money. Lenders will request Nehemiah Gift Funds on behalf of the Homebuyer, and provide simple closing instructions to the closing office. Nehemiah will do the rest. 14. If I refinance my existing home loan can I get Nehemiah gift funds? No, you may not receive Nehemiah Gift Funds when you refinance your existing home loan. The Nehemiah Program provides Gift Funds to assist people in obtaining initial homeownership. 15. Do I have to repay the gift? No. The Gift Funds are free monies offered by Nehemiah to qualified Homebuyers, requiring no repayment, no silent second mortgage, and no re-capture penalties. The money given to the Homebuyer is a gift. However, the amount of the gift plus a participation fee of $500 to $750 is financed as part of the loan amount. Whatever purchase price that is agreed upon must be substantiated by a valid appraisal. 16. Is the Nehemiah Program for everyone? No. It is my opinion that the Nehemiah Program should only be used for Homebuyers that anticipate purchasing a home and living in it at a minimum of 5 or more years. The Buyer should understand that they will be financing up to a 100% or more of any equity in the home. The home purchase will be substantiated with a valid appraisal that will reflect that what was offered and accepted between the Buyer and Seller is the market value at the time of purchase. Future improvements to the interior or exterior of the property by the Buyers, after occupancy, may decrease the number of years they may need to wait before becoming Sellers. 17. How can I get started using The Nehemiah Program today? You can get started by visiting or calling Brady Pierce at (435) 787-8351 or by sending an email to bradypierce@comcast.net.
The Nehemiah Program is subject to availability and may change without notice. Above information adapted from brochures available from The Nehemiah Program as of 11/2003. Opinions expressed are the beliefs of Brady Pierce, a licensed Utah Real Estate agent in Cache County, UT.
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