A Federal Judge ruled in favor of down payment assistance companies.

This ruling allows down payment assistance to continue indefinitely. This is great news for home buyers and home sellers alike. Previously, down payment assisatance was to be ended as of February 29th, 2008.

Down payment assistance allows a buyer to utilize existing property equity for purposes of down payment and/or closing costs. The seller must agree to allow the down payment assistance, and the home must have the sufficient equity in order to qualify. Basically, down payment assistance works much like a seller's concession, where the seller concedes some of the profit form the sale at the closing table to be used to pay some of the buyer's closing costs. The difference with down payment assistance, however, is that it utilizes a non-profit company to act as a middle man in the transaction. This makes the money act as a gift, and therefore can be used for down payment, in addition to closing costs.

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