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Homebuilders offering incentives for buyers, but time is running out

Homebuilders are always trying to sell their homes, but these days they have an extra incentive - beating the clock.

A financing option used by almost 20 percent of new-home buyers to help scrape together a down payment is expiring Oct. 1, making it tougher for many to buy a home.

It's a loophole in the Federal Housing Administration rules that let builders and other home sellers channel money through a charity to help homebuyers cover their down payment.

But lawmakers axed the programs because almost 40 percent of FHA borrowers who went into foreclosure since last October had down-payment assistance.

With the looming deadline, there "is a big incentive to buy now versus later, when you most likely won't have that option for you," said Robert Curran, an analyst with Fitch Ratings. "It makes a lot of sense (for builders) to do a lot of promotions on that."

For builders, losing the down-payment assistance programs comes at a tough time   Read Full Article...