What is American Dream Downpayment Act?

The American Dream Downpayment Initiative (ADDI) was signed into law by President George W. Bush in December 2003. This became the Amreican Dream Downpayment Assistance Act, which authorized $200 million to be paid out each year between 2004 and 2007 to help first-time homebuyers afford new homes. The goal of ADDI was to increase the home ownership rate, particularly among low-income families. Eligible first-time homebuyers could receive up to $10,000 to use towards down payments, closing costs an rehabilitation of homes.

This program has since ended, meaning you cannot receive federal assistance for buying a home through the American Dream Downpayment Act at this time.

You may be able to receive mortgage assistance through one of the Making Home Affordable programs currently being offered by the U.S. Department of Treasury and the Housing and Urban Development Authority.

Making Home Affordable

The Financial Stability Act of 2009 established the Making Home Affordable Program. Making Home Affordable, like the American Dream Downpayment Act, is designed to help Americans cope with the high costs of mortgages or modify mortgages that they cannot afford. There are a number of programs currently available:

Mortgage Assistance Programs to Lower Your Monthly Payment - Includes the Home Affordable Modification Program (HAMP), Principal Reduction Alternative (PRA), FHA Home Affordable Modification Program (FHA-HAMP) and others.
Mortgage Assistance Programs to Lower Your Interest Rates - Includes Home Affordable Refinance Program (HARP) and the FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance) programs.
Mortgage Assistance for the Unemployed - Includes the Home Affordable Unemployment Program (UP and the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHP)

To find out if you are eligible for any of these programs, you can visit the Making Home Affordable website and take the mortgage assistance eligibility questionnaire. If you do qualify for any of the aforementioned programs, you can get in contact with your local HUD adviser or ask your current mortgage lender about your options.

Avoiding Scams

Many predatory lenders and unscrupulous mortgage advisers have been taking advantage of the sometimes incomplete public understanding of federal assistance programs. To help protect yourself from scams, make sure you only get advice from a licensed and reputable mortgage broker or a HUD-approved mortgage counselor. HUD-approved counselors will offer you advice on receiving federal assistance and can help guide you towards your best course of action.

To speak with a HUD-approved mortgage counselor, you can call 1-888-995-HOPE (4673). This number is available 24 hours a day, 7 days a week. However, the expert you speak with may set you up an appointment with a local HUD-approved counselor who can help you with your specific needs and local market.

Conclusion

Government assistance and federally-backed mortgage programs have been an integral part of the American economy for the better part of the last decade. As a homebuyer or homeowner, there are a number of opportunities available to you. Explore them all and see how much money you can save.