Well, it is now official. One of the first-time homebuyer programs the FHA currently provides, is ending as of 1 October, 2008. This program allowed someone (seller, builder, friend, relative, etc.) to gift the 3% down payment requirement to a first time homebuyer.  After October 1st, relatives or friends, or anyone that will not benefit from gifting the 3% down payment is allowed to gift/contribute the 3%. You just won't be able to request the seller or builder to contribute this down-payment any more.

This program is still in effect through September, so if you're a first-time homebuyer, you can still find a home, and take advantage of this program as long as you close on the property prior to October 1st.

So why is this happening? Well, the primary reason that lawmakers have stopped this program is that 40 percent of those FHA loans that used this program just since October have gone in to foreclosure.

This does limit those that don't have 3 percent saved up to put down on a home, or a friend or relative that can gift the funds, however, all is not lost. Keep in mind that there are other programs for first time home buyers. In Florida there is the SHIP program as well as Florida Bond money--programs that can be used together and you can qualify for up to $17,000 in assistance to buy your first home. FHA will still allow use of these programs. There are stipulations for each program, however, they are designed to help the first time home buyer with down payment and closing costs. You may still have to provide funds for the down payment, but you may not need as much as you think.

And let's not forget about the $7,500 tax credit for first time homebuyers as well. This is a program that is expected to last only a year, but will give you a credit spread out over a few years.

SO--the question is, are they any truly 100 percent loans available any more? Well, things are always changing, however, right now--today, there is only the VA Loan program and US Rural Housing Loan that are 100% loan programs.

With a VA loan, you have to have served in the military for a specified amount of time (it differs from full time active duty and reserves/guard duty).

With a Rural Housing Loan, the home has to be in a Rural Housing area. In Fort Walton Beach, FL, there are no homes that fall in to the rural housing category, but there are some in Mary Esther. Crestview, and Defuniak Springs both have plenty of these opportunities, as well as some homes in Destin. There is a website that your lender or realtor can go to and input the address--and find out if it is considered a rural housing area.

SO, if you aren't qualified for a VA loan, and not in a position to use a rural housing loan, and want to take advantage of this FHA program, get to your friendly lender, call your neighborhood realtor, and get started!! Time is running out!

GOOD LUCK!