There is a lot of confusion regarding the suspension of the seller-financed down payment assistance programs that are often used with FHA loans. Nehemiah and Ameridream are the two largest organizations providing this assistance.
The federal housing law that was recently passed prohibits these programs for all loans that are not approved by October 1, 2008. If a loan has been approved and signed by an underwriter prior to October 1, then the down payment assistance can still be used, even if the closing takes place after October 1. A number of lenders are discontinuing the programs earlier than that, but there are plenty of lenders who are not.
There is a bill before the House that will reinstate the programs, but it has not been passed yet. At the moment, they go away on October 1, but not before October 1.
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