No Money Down is under attack from your government

I for one think that homeownership is the single most defining difference between the lower class and the middle class. I believe that homeownership is a clarion call for all governments to attempt to do anything to increase the number of people who own.

Right now, it appears that the Federal Government is attempting to shut down the Down Payment Assistance (DPA) business. I guess to be frank, I'd like them to stay out of it, leave it alone. Nehemiah, the largest DPA, would like to see more regulations since that would help them cement their near monopoly on the business.

I disagree and think that the DPA business should be left alone and let competition do what it does so much better than the government lackeys. Here is the contents of an email I received today from a good friend in new home construction and home building in Indianapolis Indiana.

It includes a link to a place where you can comment to the government about your opinions:

SUMMARY OF SUBCOMMITTEE HEARING ON HUD RULE On May 11, 2007, the Department of Housing and Urban Development (HUD) issued a proposed rule on "Standards for Mortgagor's Investment in Mortgaged Property" (FR-5087-P-0). The proposed rule states homebuyers using mortgages insured by the Federal Housing Administration (FHA) be prohibited from accepting downpayment gifts that are indirectly funded by the home seller. HUD has given the housing industry and consumer groups until July 10 to comment on its proposal to eliminate downpayment assistance (DPA) programs.
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If implemented as written, this ruling will end The Nehemiah Program and similar programs. The Subcommittee on Housing and Community Opportunity: <http://financialservices.house.gov/subassignments.html> <http://financialservices.house.gov/subassignments.html> , lead by Chairwoman Maxine Waters (CA), held a hearing on Homeowner Downpayment Assistance Programs and Related Issues at the Rayburn House Office Building in Washington, D.C. on June 22, 2007. The purpose of the hearing was to address public interest in this issue and answer questions surrounding downpayment assistance programs offered in communities across the United States.

Meg Burns of HUD confirmed that the proposed rule stems from HUD's concern that privately-funded downpayment assistance inflates home appraisals, causing higher default rates which will impact the FHA Insurance Fund.

Every Subcommittee member suggested that HUD withdraw the proposed rule and implement regulation to monitor privately-funded DPA programs in order to increase its effectiveness.
Subcommittee Chairwoman Maxine Waters (CA) suggested that HUD extend the July 10 comment period deadline on the proposed rule for another 30 days. Representative Waters also recommended adding language to a FHA reform bill (H.R. 1852) that would override HUD's proposed DPA rule. Ms. Waters, along with several other committee members were concerned that HUD was trying to exchange downpayment assistance for the "zero down" loan product included in H.R. 1852.

Nehemiah will continue to update you on any new developments.
To view the archived hearing webcast and read testimony from the hearing, click on the link below.
<http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht062207.shtml%20>

Nehemiah’s Position
The testimony during the hearing renewed Nehemiah's plea to have industry regulation or guidance from HUD. The Subcommittee unanimously agreed.
Downpayment assistance has been responsible for creating over 500,000 low-and moderate-income (LMI) homeowners since 1997 and represents approximately 40% of the FHA current mortgage portfolio.

The performance of privately funded downpayment assistance could be significantly improved by imposition of industry wide performance standards that support successful homeownership, and the lack of standards and best practices for the last decade means that as successful as downpayment assistance has been, its performance would have been greatly enhanced by the best practices and program requirements that groups have individually and collectively advocated.

" Downpayment assistance creates instant equity for the homeowners."
Rep. David Scot t, GA

"Let’ s not throw the baby out with the bath water."
Rep. Gary Miller, CA

"Regulate it appropriately and make it work."
Rep. Al Green, TX

"Amend it; don’ t
end it."
Scott Syphax, Nehemiah President and CEO
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JUST A FEW DAYS LEFT TO COMMENT ON HUD RULE
To date, over 9,000 DPA recipients, consumers, and industry professionals have submitted comments to the federal regulations website (http://www.blogger.com/www.regulations.gov: <http://www.regulations.gov/> ).
If you have already submitted your comments, Nehemiah thanks you for your support.
If you have not had a chance to make your voice heard regarding this rule, you must speak up now!

July 10, 2007 is the deadline for public comment on the proposed rule.
<http://takeaction.ahaanow.org/>

Submit comments through the Association for Homeowners Across America website at: http://takeaction.ahaanow.org/: <http://takeaction.ahaanow.org/>
* Click on the "Take Action" button.
* Scroll down to Compose Message.
* When finished, enter your contact information and click "Send Message".