Comments on: New Program Can Make You An Underwater Homeowner In Two Weeks- Or Less! http://housingdoom.com/2009/03/16/new-program-can-make-buyers-underwater-in-two-weeks-or-less/ "He who defends everything defends nothing." - Frederick the Great Fri, 19 Mar 2010 18:49:42 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: tanstaafl http://housingdoom.com/2009/03/16/new-program-can-make-buyers-underwater-in-two-weeks-or-less/comment-page-1/#comment-19351 tanstaafl Mon, 16 Mar 2009 21:20:23 +0000 http://housingdoom.com/?p=2107#comment-19351 I don't get the part about the disappearing equity. Can someone help me out? "The program provides up to $30,000 for down payments, up to $5,000 for closing costs and up to $45,000 for repair." So let's say the homebuyer buys a $200,000 home with $2,000 of his/her own money. Does the government kick in $30,000 to make the down payment $32,000? If so, then the homebuyer has 16% equity (if the purchase price has not been inflated)--a pretty good chunk made possible by the taxpayers that will not disappear in 2 weeks. Additionally, will the homeowner get an extra $45,000 from the taxpayers to fix up the house? This will add additional equity if the $45K is spent wisely and increases the value of the house above $200,000. Let's say the repairs add $20k to the house value. Now the homebuyer has $32K + $20k = $52k of equity. (Again, I assume that the original purchase price of the house was not inflated.) It sure is a crappy deal for taxpayers, but if the program works as I described the homeowner will have a lot of equity that won't be underwater unless housing prices continue to tank for a while. I don’t get the part about the disappearing equity. Can someone help me out?

“The program provides up to $30,000 for down payments, up to $5,000 for closing costs and up to $45,000 for repair.”

So let’s say the homebuyer buys a $200,000 home with $2,000 of his/her own money. Does the government kick in $30,000 to make the down payment $32,000? If so, then the homebuyer has 16% equity (if the purchase price has not been inflated)–a pretty good chunk made possible by the taxpayers that will not disappear in 2 weeks.

Additionally, will the homeowner get an extra $45,000 from the taxpayers to fix up the house? This will add additional equity if the $45K is spent wisely and increases the value of the house above $200,000. Let’s say the repairs add $20k to the house value. Now the homebuyer has $32K + $20k = $52k of equity. (Again, I assume that the original purchase price of the house was not inflated.)

It sure is a crappy deal for taxpayers, but if the program works as I described the homeowner will have a lot of equity that won’t be underwater unless housing prices continue to tank for a while.

]]> By: freemonster http://housingdoom.com/2009/03/16/new-program-can-make-buyers-underwater-in-two-weeks-or-less/comment-page-1/#comment-19338 freemonster Mon, 16 Mar 2009 13:13:25 +0000 http://housingdoom.com/?p=2107#comment-19338 Obamamania is obviously alive and well. This just can't get any more bizarre. The more you mix the "wards of the state" into neighborhoods the more depreciating values you'll see in those neighborhoods. I see your next post is the Bernake softball interview. So on to that. Obamamania is obviously alive and well. This just can’t get any more bizarre. The more you mix the “wards of the state” into neighborhoods the more depreciating values you’ll see in those neighborhoods. I see your next post is the Bernake softball interview. So on to that.

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