July 22, 2008
Downpayment Assistance Programs Appear Doomed
We have previously blogged on the efforts in Congress to shut down seller-funded down-payment assistance programs here and here. It looks as though defenders of seller-funded down-payment assistance programs (including me) will soon lose the battle, if not the war. Today's Washington Post reports that the House has agreed to a Senate provision that will effectively eliminate those charities -- at least for the time being:
Mortgage programs that helped nearly 79,000 people buy homes using government-insured loans last year would be eliminated as part of a broader housing package that Congress expects to pass this week, key lawmakers said. Under these programs, nonprofit groups provide buyers with money for down payments. Home sellers then reimburse the organizations and pay an administrative fee. More than half a million people -- including many first-time home buyers, minorities and single mothers -- have bought homes this way in the past decade using loans insured by the Federal Housing Administration.
I still say the Congress is "throwing the baby out with the bath water" as one reader put it. Members of the Congressional Black Caucus and the Congressional Hispanic Caucus say they will try to revive seller funded down-payment assistance charities when the next president takes office, according to the article.
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