Paint Equity Reduces Home Price
We can be awfully creative when it comes to selling something. Trend Homes in Chandler is now using "paint equity" to effectively reduce the price of its houses.
One local home builder is trying to paint itself out of a corner by handing out smocks, rollers and brushes to prospective buyers.
When builders found out in late July that the government was going to ban seller-funded down-payment assistance on Federal Housing Administration loans, they began a mad scramble to come up with another way to offer no-down-payment or low-down-payment mortgages.
After poring over FHA guidelines in search of a loophole, this is what Chandler-based Trend Homes came up with: paint equity.
FHA rules allow a home's seller to contribute up to 2 percent of the buyer's required 3.5 percent down payment as compensation for work performed by the buyer on the home.
Thus was born the Trend Homes Work Equity Program.
Previously they were simply giving the purchasers the money for the down payment.