If the bill Rep. Al Green proposed passes into law, borrowers looking to get an FHA mortgage may once again receive down payment assistance.

The bill, HR 600 — the FHA Seller-Financed Down Payment Reform Act of 2009 — would help borrowers who don’t have the money for a down payment become homeowners. Down payment assistance was outlawed last October, but Green’s proposed HR 600 would revise the requirements for the program. By creating this type of opportunity, the number of potential foreclosures would decrease and the failing housing market would be on the rise to recovery.

“Seller down payment assistance has helped more than one million Americans who are able to afford a monthly payment but do not have the down payment needed to become homeowners,” Green said in a Central Valley Business Times article. Down payment assistance would cost the federal government nothing over the next five years and actually save taxpayers money.

Nehemiah Corp of America, who pioneered the program, said that by reinstating down payment assistance, about 600,000 working-class people would receive aid for their home purchase next year alone, which would create $150 billion in home sales.

HR 600 has been referred to the House Committee on Financial Services, of which Green is a member, and is awaiting consideration. If committee members report the bill favorably, it will then move to be voted on by the House as a whole.

There is no doubt that the foreclosure numbers for the year of 2008 are staggering. According to RealtyTrac.com, a leading industry monitoring website, some 860,000 properties were foreclosed on in 2008. That number is shocking, but what is even worse to consider is what the future holds. Many of you may be included in the next few month’s foreclosure numbers, unless you take the time now to talk to an FHA loan specialist who may be able to get you out of the loan or help you to have it modified.

What’s Next?

Consider this next year. The numbers for 2008 are from throughout the year. The problem is, many of the harshest layoffs and the largest job loss did not happen until the end of the year. They are still happening in January of 2009. That means that many of these individuals, who have lost their jobs or otherwise lost income are just now getting behind on their mortgages. The foreclosure process can take six months to go through. This translates into staggering numbers for the 2009 year. These foreclosures are not likely to hit the books for another four to six months. And, with thousands of people out of work, they will be incredibly deep and painful.

There is little that can be done about a home that is deep into the foreclosure process. Yet, for most individuals the process can be stopped long before it gets to that point.

Checklist of What to Do Now

If you are facing the fact of being unable to make payments on your mortgage, here are some things to do, now.

#1: Talk to your lender to find out if they can help with loan modification. They may be able to help you to get caught up. This is especially important if you wish to keep the home and have the income to make payments.

#2: Talk to an FHA loan specialist, or someone who can help you to qualify for an FHA loan. The FHA has put together special packages and outlines specific options for those who are suffering and are behind on their mortgages.

#3: Don’t wait. The longer you wait to get help for your mortgage loan, the more difficult it will be to get caught back up.

Foreclosure is not a process you can’t stop. You can, and with some help, you may save money in the process.

A Closer Look at the Numbers

What is happening around you? Take a look at a few more numbers as they came out just a few days ago.

•    In 2008, 1.1 million people received foreclosure notices in the combined states of Nevada, California, Florida and Arizona.

•    20 percent of the 1.1 million homes that entered the foreclosure process were located in California.

What is happening where you are? If you aren’t sure, you can use RealtyTrac.com to get a better idea.

Most individuals in foreclosure today are not in foreclosure because they are irresponsible or took on bad loans intentionally. They simply are struggling, which is why so many of them are just looking for help.

Is this you? To find out if you qualify for any type of loan modification or to freeze your foreclosure, contact one of the FHA loan specialists. There is no guarantee that every homeowner can remain in their homes, but many individuals can. The opportunities available through FHA are helping thousands of people each month to stay in their homes and to avoid foreclosure. They may be able to provide you with the help you need, too.

For those who are looking for an FHA loan, you may be happy to learn that the FHA still has some great loan opportunities available for those who qualify for them. The Federal Housing Authority, or FHA is still offering home loans requiring just 3.5 percent down. This is good news to anyone that is struggling to find a loan available to them do to the numerous issues with the credit crunch.

In the traditional, conventional loan market, there is no doubt you will have a difficult time finding a home loan that does not require a larger down payment to be made. Some lenders are now insisting on down payments at 20 percent of the home’s value. Those who cannot afford this may not have an option outside of the FHA loans available.

The FHA does still have loan opportunities available, including loan programs offering 3.5 percent down. A low down payment is the critical aspect for many potential home buyers. Having 20 percent or more to put down on a house is a great way to get a low rate and it enables lenders to look at you more favorably.  After all, after you have invested that much into the home, you are unlikely to just walk away from it. Since lenders are trying desperately to protect themselves from further foreclosures and subprime loans, they are simply sticking with what they know: those who invest in a larger down payment are less likely to walk away from their homes.

Are They Safe?

One of the biggest concerns people have today when it comes to FHA loans is security. Rightly so, people want to ensure that the home loans are going to be safe to have. When you work with an FHA loan specialist, you can ensure this is the case. Most lenders accepting these loans are well qualified to do so. Even if they do fold, you are highly unlikely to lose your loan or any of your financing. Still, you can speak to the specialists to learn more about this.

How To Get An FHA Loan

Since FHA loans do allow for the much lower down payment, many people are using them as the means to get the home they want. You will need to work with an FHA loan specialist to enable you to find out if you qualify for this type of loan insurance. You can get prequalified to purchase a home within a few minutes, too. Unlike a few years ago, standards have tightened, though.

•    You will need that 3.5% down payment or more
•    You will need to have no more than 31% of your gross income going towards paying your mortgage
•    You will need to have good credit. Those with serious delinquencies on their records may not receive approval.

If your credit score is lower than 500, though, you may need to pay a larger down payment, up to 10 percent. Moreover, as with all FHA loans, you will need to pay mortgage insurance during the first years of your loan.

You can find out if an FHA loan is right for you by contacting any of the FHA specialists available. They will ask you a few questions and get information about your credit score for you. Generally, the process takes only a few minutes to work through. You can get a quote for an FHA loan, too, so you can see if this is an option for you.

If you have 3.5 percent to put down and meet the other qualifications of FHA loans, now is one of the best times to get investing.

CNN Money.com published an article today about why FHA loans are gaining popularity.  You probably already know the reasons but to sum it up: 3.5% down (try finding less than that these days), low rates, and attractive loan limits.  I highly recommend taking a look their article because it has some great FHA info and good examples as well.