Part of the new housing bill is a provision that would eliminate the downpayment assistance programs that currently allow buyers to purchase homes with no money down. FHA will only finance up to 97% of the purchase price of a home, and the other 3% is officially not supposed to come from the seller. But a loophole allows for a non-profit charitable organization to pay that other 3%. So right now a buyer can legally get an FHA loan and have the seller donate the remaining 3% to one of these non-profits and then get the non-profit to give it as a gift toward the downpayment. If the seller is willing to cover the closing costs as well a person can still easily and legally purchase a home with no money down. FHA doesn’t like this loophole and wants to close it because they have data that shows that people who do not pay out of pocket to get in to a home are more likely to foreclose later.
This provision may be bad news if you were hoping to get a home with no money down but it is likely going to be healthy for the FHA.