Equity At Purchase Through Charity
One of my clients just told me about something that sounds pretty fishy. He says there is a company - a "charity" - that will allow this scenario:
Say there is a prop on the market for $50K below market. Seller sells a house to buyer for full price and the seller assigns the equity - $50K - to this charity. The seller writes of the donation and the buyer gets a check from the charity for equity less fees.
Has anyone ever heard of this?
Does not sound legit. WHy would the charity give the buyer any money?
There are several programs that do this. The only one I have any experience with is the Nehemiah group.
You might find this thread helpful:
http://www.thecreativeinvestor.com/modules.php?op=modload&name=Forum&file=viewtopic&topic=33015&forum=30
That's not what I'm talking about. Nehemiah etc is for seller concessions with a cap. This is where the buyer can get the equity out on an investment purchase at closing.
Nehemiah's contribution and the seller concession are two totally different things.
You can use Nehemiah for up to 6% of the sales price and between 3-6% as a seller concession leaving you with 9-12% depending on what the lender allows.
You don't even have to go with the charity loans if you use a lender that doesn't season the down payment. Simply get someone to lend you 6% of your purchase price for 10 min while you deposit it into your bank, get the verificaiton of deposit signed, then withdrawl the money.
Nehemiah funds at closing while there are others that fund outside of closing. The ones that fund outside of closing will typically do so after closing and also after the seller has paid them the contribution + fee.
The company that will fund outside of closing charges 10-20% premium rather than a $500 fee like Nehemiah. I haven't used this company for down payment assistance but I have used them to give the seller money through a short sale.
I hope this gives you what you are looking for. If not, simply post another question.