H.R. 6694, The FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 (148 comments ↓ | 5 wiki edits: view article ↓)

  • This item is from the 110th Congress (2007-2008) and is no longer current. Comments, voting, and wiki editing have been disabled, and the cost/savings estimate has been frozen.

H.R. 6694 would revise the requirements for seller-financed downpayments for mortgages for single-family housing insured by the Secretary of Housing and Urban Development under title II of the National Housing Act and to authorize risk-based insurance premiums for certain mortgagors under such mortgages.

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August 5, 2008, 1:04pm (report abuse)



John Andrade

August 5, 2008, 1:47pm (report abuse)

The money supply is shrinking at an alarming rate. Our economy desperately needs stimulus. We need to loosen credit, not tighten it. We all need to have our Congressman vote for HR 6694 or our Housing Market may lead our country into a Depression.

Comrade Vlad

August 5, 2008, 3:07pm (report abuse)

Once again, the US makes a wise move towards da Communist left. Thank you, brothers. This way can truly share in the happiness of our Brothers . . . even though the rest of us will pay for all of this government intervention TO SAVE BANKS and loan sharks who have made fortunes off of the little guy. There must be a better way. I don't know if it might be better to just have that depression. People might have to work. Working is good. Working for lazy people who live beyond their own means is NOT GOOD. The houses can be resold. Banks take the brunt of it, yes, and housing prices may go down . . . for a while, but that's not the end of the world. Things will pick up. Others, who can afford the house, buy it, make payments and those who can't look for more modest living arrangements, opening up an entirely different market middle-lower-income class homes. Not as luxurious, but something they can afford.

John Kingston

August 8, 2008, 3:06pm (report abuse)

The FHA would have you believe that folks with their own money in the transaction are less likely to default. I contend that if hardship strikes, having less in savings will speed an owner's downfall. Please support H.R. 6694 and foster home ownership, which drives our economy in so many ways.

Michael Pond

August 9, 2008, 8:39am (report abuse)

Reform Down Payment Assistance (DPA), do NOT kill it! If the default rate is 3 times the national average for DPA loans that still means that 9 out of 10 homeowners are paying on time as agreed! I think we need to require homebuyer education classes to teach potential homeowners how to budget and what is required to own a home. Reform the program to handle the problems with it. Do not take away a program that truly helps hundreds of thousands of low/moderate income families achieve the American dream of homeownership.

Chuck Webb

August 11, 2008, 11:08am (report abuse)

FHA estimates that 37% of all FHA loans use DPA funds. Based on that, is the elimination of DPA going to have a positive impact on the housing market and the ecomony? Has anyone in Congress who is against DPA got a clue as to what is going to happen it they continue to ignor the obvious? Here is a program that works without taxpayer money and helps promote the "bottom up" nature of the housing industry. If first time home buyers cannot get into a home, the market will not operate. Our government needs to realize that personal income has risen about 1% over the past decade, while housing prices has increased over 30%. If we do not have non-profit seller-funded gift programs such as this, our housing market in particular, and the economy in general will be in trouble. Please take a moment to write your Senator and Rep and tell them to vote YES for DPA.


August 12, 2008, 11:21am (report abuse)

I am trying to look at this one from both sides, but i am only seeing a major advantage for one class...errr... group of people...

by closing off down payment assistance you will make a person save his/her own money for a home, this shows the ability to save money, where this may have been the goal in the bill that shut off down payment assistance this does not take into consideration the other things people can do if properly educated with the same funds... things that may take them out of the current situation that keeps them from being able to purchase their own home. Please keep in mind that this down payment assistance fund is not meant for well established people who have owned many homes, it is meant for first time home buyers, many of whom do not have the support of family to lift them to where they can not yet reach. I understand some of you have allways been able, but how much of that support did you achieve on your own, and how much would you have had without family?

Chuck Webb

August 12, 2008, 6:22pm (report abuse)

DPA is not a fund. It is not meant for any particular "class" or "group" of home buyers. It is a program which is administered for a specified transaction. It can also be used by other buyers, regardless of how many homes that they have owned, so long as they can qualify for the loan.

Rachel Smith

August 12, 2008, 6:25pm (report abuse)

I think that down payment assistance is sometimes the only way that people can get into homes. How does stopping someone from getting into a home help the ecomony?

Linda DeLaughter

August 15, 2008, 10:52am (report abuse)

If not for H.R.6694, I would not be living in my wonderful home today. It enabled me to become a homeowner again, after a divorce. America needs this bill. Many people are able to afford a house payment, but have trouble coming up with the necessary down payment. H.R.6694, is the answer to their prayers. It was the answer to mine. Keep H.R.6694.


August 16, 2008, 5:36am (report abuse)


Back the Bill

August 16, 2008, 7:10am (report abuse)

You need to watch this YouTube video on the way in which HUD tried to ban down payment assistance. http://www.youtube.com/watch?v=g2CLQABK-S8

Block and paste this address to your browser. After seeing this, please call your Congressman and have them vote FOR H.R.6694.

Larry Delbridge

August 18, 2008, 12:54pm (report abuse)

We have made a lot of Down Payment Asssistance loans. Per our Statistis with HUD our default rate is very low. About 70% of our business is FHA loans and about 70% of our FHA haver Down Payment Asssitance. When consumers loose the source of finaning, home sales in our area are going to go from sluggish to Stopping. Consumers need this, the economy certainly needs this, Realtors need this and mortgage lenders need this. These loans have preformed well for us.


August 19, 2008, 11:11am (report abuse)

As a mortgage loan officer, I have seen first-hand how much these programs have helped homebuyers, especially first-time homebuyers, who would not have otherwise been able to purchase a home. In many discussions I have had over the past several weeks with lending and real estate professionals, everyone agrees that the elimination of these programs (like Ameridream and Nehemiah) will have a serious negative impact on our businesses, and more importantly, on the ability for families and individuals to become homeowners.

Please ask your representatives to support this bill (HR 6694). I believe it is in the best interest of the housing industry, the economy, and hundreds of thousands of potential homeowners.

Donna Harrison

August 19, 2008, 7:20pm (report abuse)

Our Economy Needs to Keep ths DPA or Up the Mortgage Insurance and give 100% Financing?

This could be the Answer!!!!!!!!!

Debbie Waters

August 20, 2008, 2:18pm (report abuse)

Unfortunately, congress is intent on placing blame on the little guy while bailing out the lenders. Potential buyers and mortgage industry professionals (lower levels, of course) are being blamed and punished, yet the lenders are the ones who provided the programs and cleared the loans to close. They should be held responsible for not doing their job and for allowing the few brokers/originators that did take advantage of the situation to continue. Congress has to place blame somewhere; it couldn't be because of lake of oversight!

We are in a small market and depend on FHA loans to service our well-deserved buyers; no DPA will devastate our market. Please support H.R. 6694 now and save our business!

Shawn King

August 22, 2008, 12:50pm (report abuse)

HR 6694 adequately deals with the risk supposedly created by these transactions. Down Payment assistance will keep the purchase economy churning without federal dollars. Get the facts at this website:


J. Johnson

August 22, 2008, 1:33pm (report abuse)

The current law, without HR 6694, is only eliminating seller-funded DPA. Seller-funded DPA is the kind of program, along with the crazy subprime and variable mortgages of the past several years, that led to the current financial crisis. 28 percent of FHA loans with seller-paid DPA were in default last year. It is literally impossible to keep FHA loans without raising premiums or receiving federal subsidy with that kind of default rate.

The current law is not phasing out DPA from relatives or other sources, just from interested parties like sellers. This only makes sense. If you are saying that a home is priced at $300,000, but the seller is paying $9,000 for a down payment, isn't the stated price artificially inflated? Isn't the buyer really paying only $291,000? That kind of transaction distorts appraisals and creates inefficiencies in real estate markets, which eventually lead to corrections. Seller-funded DPA has no place in a free market.

Chuck Webb

August 22, 2008, 3:22pm (report abuse)

In the HUD report, http://portal.hud.gov/fha/investment/5087-N-04_DPA_Pub_6-11-08.pdf , the To-Date Claim Rate Comparisons on FHA-Insured Home Purchase Loans by Source of Downpayment Funds and Fiscal Year of Insurance Endorsement for non-profit DPA decreased from 16.07% in 2000 to 0.41% in 2007...that's less than one percent...not 28%. This indicates that DPA is being more effectively applied and more prudently administered by the mortgage industry. DPA is suffering from misconception, slanted statistics, and a vendeta by HUD, which are the same people who sat by and oversaw the worst housing debacle in US history. We should all support programs which create economic growth without taxpayer dollars. Support H.R.6694!

Theresa Abrams

August 22, 2008, 8:15pm (report abuse)

FHA and legislators have had a "knee jerk" reaction to the recent mortgage implosion. What they fail to understand is that the reason for this implosion is directly related to creative programs that gave home loans to people that could not afford the payment or the home AND had horrible credit and should not have even been able to purchase a home. If 100% financing is so terrible, then why do we not have more defaults and foreclosures on VA loans? They have been at 100% LTV for decades. It all boils down to underwriting guidelines and real underwriters that understand how to review and underwriter a borrower. As a loan officer, 7 out of 10 files I originate are FHA with DPA. 70% is a huge impact to the economic health of the country.

Ruth Vogt

August 23, 2008, 9:22am (report abuse)

The housing industry is currently in a national... shall we say, "slump", right? And why is that? Because we have more sellers than buyers. So where can we find more buyers? hmmmm... renters maybe?? Yet 30% of all renters aren't buyers due to lack of down payment.

So let's review this again:

Renters can't buy starter homes because they don't have a down payment.

Move up buyers can't buy bigger because they can't sell their starter home.

And luxury home buyers can't enter that market because they can't sell their homes either!

And we are rebating whether the down payment assistance program is really going to be GOOD for the housing industry?? Hello???

There is a great report on the effect of home ownership on families at http://realtytimes.com/rtpages/20010705_improve.htm. Please read the report. Then call your Congressman and plead with them to support HR 6694. OH! And tell your friends and family to do so, too!

John Adams

August 26, 2008, 3:47am (report abuse)

After spending a month looking at homes, I am told that I will not be able to get the loan approved before the Nehemiah Program expires.

So, what am I to do? Spend every last penny I have on closing costs and not even have enough money left over to replace the rotten carpet?

End result: My Realtor wasted her time, money and gas showing me houses. I wasted my time, money, and gas looking at houses. Another house stays on the market - It has been on the market for nearly a year. I will have to commute 90 miles to work while living at my parents house at the age of 41.

I can afford to make the mortgage payments no problem, but I can't afford the closing costs/down payment and be able to make the house liveable.

That is the problem. I don't care how the problem is solved. Many, many people like me can afford mortgage payments, but we can't get far enough ahead while paying rent, etc to make a down payment on a home.

Jim Reagon

August 26, 2008, 4:07am (report abuse)

With the expiration of the Nehemiah program, many, many people with good salaries, like me, but no ability to save up for a down payment will be taken out of the housing market.

I guess that is fine. Why not make the housing market just completely crash, so I can buy a $400,000 house that is now listed at $180,000 and is soon to be listed at $50,000 after the Nehemiah Program expires.

Ofcourse I won't buy it at that price, because that sort of pricing in the neighborhood would bring in an element that I wouldn't want to live next to, and cause all those that over-paid for their houses to foreclose.

D Nac

August 27, 2008, 1:12pm (report abuse)

The elimination of DPA is going to put countless people out of work in my state alone, from realtors to title agents to mortagge professionals. The provision in the new housing bill may end up to be one of the biggest factors forcing an already suffering housing market over the brink. These are the representatives we voted for, and now they have voted to pass a provision that will put families out on the street. This is a fact.

J. Lawrence

August 28, 2008, 12:03am (report abuse)

The problem has not been with down payment assistance programs of any type - seller financed or through non profit organizations. The problem has been with allowing buyers to purchase too much home for their income without regard to their current credit situation. That of course brings us to lenders being rewarded in the form of bonuses and other creative pay structures, for all loans regardless of risk involved. Lenders should not receive bonuses for lending, but should be held accountable for the loans they make.

Without down payment assistance, current inventory will only continue to rise, which will ultimately lead to even more foreclosures. So who are we helping? Down payment assistance isn't the problem - irresponsible lending is.

CA Woods

August 29, 2008, 4:39pm (report abuse)

DPA elimination is just the final push to make the "Mortgage Meltdown" explode to no recovery. We all know the statistics and the results of eliminating these individuals from being a potential home buyer. Are we sure the Renter's Association wasn't the lobbyist behind this one? Changes all the way around in the lending guidelines need to be reevaluated before we destroy the housing market completely. I have been doing mortgages for 4 years, many of them with investors, and none of my clients have defaulted or allowed their homes be foreclosed on. HUM, just smart lending practices is the lesson here. GOVERNMENT CONTROL so they can justify the FHA product is the ELECTION YEAR hard at work. Always remember, FannieMae and FreddieMac use to allow DPA as well as FHA. In today's lending environment, we need to keep DPA in place so we have more borrowers to replace the investors that have now been eliminated from buying homes.

House Hunter

August 30, 2008, 4:54am (report abuse)

300,000 buyers locked out in the next 12 months. did I read that right? Once again, we are throwing the baby out with the bath water. 94/100 are paying on time. It seems to me that we should reform the guidelines to reduce the default rate. But doing away with it will only drag this housing mess further down. Am I missing something here? Why would our President ever agree to this. oops I just answered my question. Our President hasn't done much right in 8 years. This only makes sinse that he would agree to a bill that locks out 300,000 buyers a year. If you want to get rid of it. Do it responsibly. 3% this year, 2% next and so on. But to stop it on a dime after we have all been taught that we don't need a dp is ridiculous.


September 1, 2008, 1:19am (report abuse)

George Bush has no concern about average Americans. Just like his

overtime policy, here he goes again.

Mark B

September 2, 2008, 5:38pm (report abuse)

This is Not a George Bush issue. Nehemiah has been a thorne in FHA's side for decades. A non-profit company determined a need and a way of making it happen for the consumers.

If FHA did not like the risk vs. cost, they could raise the cost of the risk for Seller DPAP in the UFMIP by 1/3rd or from 1.5% to 2.25%, just like they did with FICO based credit risk pricing.

It is the agancy which did not have enouph imagination and messed it up in congress.

Carrie Ramirez

September 2, 2008, 5:41pm (report abuse)

This program has helped thousands of home buyers. I beleive a home buyer is going to default whether they have money into the house or not. This loan is a full doc loan to verify any information. The gift program just helps those save money incase something should happen.

Chuck Webb

September 3, 2008, 1:12pm (report abuse)

Mark B, Well said! HUD sat idly by and watched the housing market crash without so much as a comment. Now, they want to blame everyone in sight, including the very program which can help get our economy and the housing market back on their feet. A tax credit is worth nothing if home buyers cannot get the help they need to get to BUY the house in the first place. The Housing Recovery Act is an oxymoron! You're right, it was easier for FHA to do away with DPA than to have the creativity and pro-active stance to strengthen it. Next week, will be a pivotal week for DPA; H.R. 6694, hopefully, will take center stage. Everyone needs to let your Congressional Reps know how you feel on this issue NOW.

Erin Frazier

September 3, 2008, 2:37pm (report abuse)

I work for a DPA company and we help thousands and thousands of people. Taking away DPA will cause the economy to be in worse shape than it already is. The builders, appraisers, processors, loan officers - ALL will suffer! REFORM it - Don't take it away completely - there is another answer to this problem!!


September 3, 2008, 8:59pm (report abuse)

I live in an area of California that was hit hard by the housing crisis and now has a very large inventory of bank-owned and short sale homes on the market. Even with the large inventory, most homes have multiple offers within days of being listed and sell for above asking price. Competition is tough and real estate agents are recommending that buyers put out 9 or 10 offers at a time in the hopes of just having one accepted. With multiple offers on every home, sellers have pretty much stopped accepting any offer that uses a DPA and banks have stopped funding loans using DPA's. Even so it hasn't slowed down the sales any.

I feel for the people who need these programs to buy a house, and for that reason, I think they should remain available. However, if my city is any example, I don't think their disappearance is going to have any major impact on the economy or housing market.


September 4, 2008, 12:05pm (report abuse)

I am a recipient of a grant and am eternally grateful for the opportunity I was given. I strongly believe this program should be preserved for people like me, who can afford to make a mortgage payment, but do not have the required down payment. As a result, I’d like to encourage everyone to ask their local representative to support H.R. 6694!

Tim Halstead

September 5, 2008, 11:18am (report abuse)

Hey JN - Altough Bush signed it, it was your CONGRESS that pushed it and passed it. Are you really that blind?

P.S. Whatever happened to a simple 100% solution? DPA is a great LOOPHOLE to achieve the same as 100% financing. By the way, HUD is now pushing $100 down payment on their own HUD REO properties. Maybe when they get rid of some of their inventory, they will re-allow others to take advantage of low or no downpayment.

Jimmy K

September 5, 2008, 12:17pm (report abuse)

Our economy desperately needs stimulus. We all need to have our Congressman vote for HR 6694 or our Housing Market may lead our country into serious economic hardship.


September 6, 2008, 12:00am (report abuse)

I am a lender and I support NO DPA. Buyers that do not put any money down walk away 100 times more then someone who has skin in the game. Its about time individuals who cant save 2 cents together not to buy a house. If that person runs into a problem how are they going to dip into savings when they have none.....I suppor the NO DPA rule


September 6, 2008, 1:33am (report abuse)

so Bob, if you support no DPA, how did you achieve your first house?

Silver Spoon? or did parents just pay for college so you could get it, if not, what if the grants werent there for your college? or should you save while in high school for that too? Grants and assistance programs are put together for people who for some reason or other cannot save a large sum of money, where you situation may not call for it, yours does not play out the same as others.


September 7, 2008, 1:18pm (report abuse)

Its another short-term fix to a problem that requires a long-term solution. It allows someone to purchase a home with little or no down payment by raising the selling price, then kicking back the difference as a down payment. This not only inflates the price but enables someone to step into a property which they have no tangible vested interst. Instead of letting property adjust to lower, more affordable prices, certain interest groups would rather legislate patches like down payment assistance. There were several factors that contributed to the artificially inflated prices of housing today and down payment assistance isn't a solution to any of the problems currently facing either buyers or sellers.


September 8, 2008, 9:46am (report abuse)

Mike and Bob,

Look around you! We live in a free market society where the sales price for everything is adjusted to compensate for something…even the price of some new cars for floor mats. So what if the sales price of a home is increased to allow for a down payment for a qualified, COMPETENT, deserving home buyer, provided that the price conforms to the local market, and the program does not require taxpayer dollars. Do you really have a problem with that? Home prices are increasing faster that the average American’s income; many deserving people may never have the necessary funds to buy a home, due to lifestyle circumstances, such as illness, having kids, and earning power. DPA is something that is right for the economy and the housing industry NOW, and represents about 37% of all FHA loans. What affects the housing market will affect everyone at some point.


September 8, 2008, 12:16pm (report abuse)


I agree that the sales price is adjusted to compensate for something. That something has been a gross artificial inflation of housing prices due to risky loans. Statistics have shown very clearly that a large percentage of the population was priced out of the market several years ago. To compensate, they just allowed people to slide into homes that they could not afford any other way. Investors used those same lending guidelines to purchase multiple properties which further escalated prices. Instead of allowing prices to adjust to a level where they would have been, had it not been for the frenzy caused by the lending fiasco, why would you advocate getting people into homes at these inflated prices with a gimmick like DPA. I am not opposed to DPA in an environment that helps people get into homes they can afford; therefore I believe that this is exactly the wrong environment for DPA.


September 8, 2008, 1:42pm (report abuse)


I see that you say you are a lender and you do not support DPA. It would be my guess that you have not had proper training on the program and how to most effectively market the program to buyers, sellers and Realtors. Since I work in the industry and have for the last 7 years I know a little about what it takes to make DPA work for everyone involved. My largest client has completed over 800 DPA transactions in the last 2 years. Of those transactions they have had 0 defaults or claims. Now this client is a bank and they service their own loans and they underwrite with great responsibility. They require the buyer to complete a homebuyer education course through a local housing agency. When these principles are in place and you have spent as much time as I have in the different communities I work in there is a different attitude with DPA. From the beginning I have always instructed Realtors to never raise sales prices to cover gifts.

Jim Lee

September 8, 2008, 5:47pm (report abuse)

Various DPA programs helped over a million US families become homeowners at a cost to taxpayers of exactly $0.00!

Where's the downside?

Not The Way

September 9, 2008, 7:50am (report abuse)

Companies like Ameridream and Nehemiah are using this legal method to get in the back door. Bush's latest bill was actually a way back to reasonable mortgage status quo. Homeowners SHOULD be required to put something down in order to purchase their home. America the Free doesn't mean free lunch. Save a few bucks, people before jumping into what's usually the biggest investment of your life.

The Amerdream and Nehemiah companies use a bogus seller's contribution to their "non-profit" status company to kick back part or all of the downpayment to the buyer. The overall sales price of the house goes up and they have to find an appraiser who agrees with the inflated price...hmmmm, where are they gonna find somebody like that? This unholy alliance is one of the factors that has caused the recent Freddie Mac/Fannie Mae bail out...let's get back on our feet before screwing ourselves again, ok?


September 9, 2008, 12:03pm (report abuse)

Not The Way,

I couldn't agree with you more.


September 9, 2008, 12:56pm (report abuse)

Jim Lee, the downside is 1) over-inflated home prices as the amount of the DPA is added to the homes sale price, causing it to be recorded at a higher value then actually sold for, 2) a higher-than-average default rate among borrowers using DPA's, and 3) putting people into homes who could not afford to save for a downpayment, and therefore, likely will also not be able to save for an unexpected loss of income or for when the plumbing breaks, the house needs painting, the roof leaks... As anyone who owns a home knows, the mortgage is only PART of the cost of ownership. Anyone unable to put money away for maintenance or the unexpected hard times is primed for failure.

SNJ Realtor

September 9, 2008, 9:49pm (report abuse)

God! Can we stop with the lies?!?! The new law will still allow DPA from NOT-FOR-PROFIT organizations and groups. The ONLY thing that is at risk of collapsing is the FOR-PROFIT company's revenue. I specialize in first time home buyers and have NEVER had to have any of my buyers use any of the companies. If they can't come up with the downpayment...THEY CAN'T AFFORD A HOUSE. No where is it written that people are to be GIVEN a home. They want a home but want everyone else to pay for it...nothing out of their pocket. The ONLY DPA's are those associated with Nehemiah, Genesis, and others. My recommendation to my sellers is that IF they get an offer asking for a "donation" to a DPA thatn they either reject it completely.

The DPA's from for-profit companies just perpetuate the problem. The only winner with the passing of H.R. 6694 are those DPA companies...the losers will be everyone else.

no shill

September 10, 2008, 1:36am (report abuse)

what a bunch of crap by realtard shills.

Cindy Wiliams

September 10, 2008, 2:17pm (report abuse)

This is very important for young buyers to be able to get into a home. This would remove a large part of Americans from the ability to own their own home. This effects thoes workers who work from pay check to paycheck who will never be able to save up enough for large downpayments. Please do not remove this ability for them to be able to own. I beg you to reconsider this!

Gary Book

September 10, 2008, 4:31pm (report abuse)

DPA's are not the answer but a lower down payment alternative for FHA is. I say forget the seller down payment assistance and create a zero or 1% down payment alternative to FHA. A responsible loosening of credit is the way to get the first time buyers into homes.


September 10, 2008, 7:49pm (report abuse)

You antagonists are a bunch of hard asses! Not everyone can purchase a house with money down, not with incomes increasing 1% per decade while housing increases 30% or more. The average American is hard pressed to live like they did in the past. In these economic times, we need programs to help support the stability and growth of the housing industry, which accounts for a large sector of the GNP. So what if the house price increases a fraction; atleast you have decreased home inventories, housing related jobs are supported, and communities are enriched with new families contributing to the economy.

Peter Cutler

September 10, 2008, 9:44pm (report abuse)

I have been a mortgage broker for the past 10 years and despite the fact that the elimiation of FHA's Down Payment Assistance (seller funded) will greatly diminish my income potential, I am nonetheless in favor of its elimination for the sake of the taxpayer. DPA essentially makes "owners" out of people who have a "renters" mentality. They have nothing invested in their home and when they face financial difficulty, they simply walk away. In fact, a renter who has a first and last month and damage deposit with his landlord has more at stake if he abandons his property than does an "owner" who utilized DPA.

Jay Wright

September 11, 2008, 1:20pm (report abuse)

While legitimate non-profit agencies provide much needed assistance to deserving buyers in a manner that promotes successful homeownership, so-called “non-profit” agencies merely advance the borrower the down payment from the seller for a fee. Companies such as Nehemiah Corporation of America, H.A.R.T. and Ameridream are prime examples of companies that provide down payments that are dependent upon seller reimbursement. Furthermore, because sales prices are increased to absorb the DPA, this assistance is said to skew prices for everyone.

See “An Examination of Downpayment Gift Programs Administered By Non-Profit Organizations” and “Mortgage Financing: Additional Action Needed to Manage Risks of FHA-Insured Loans with Down Payment Assistance” was completed by the U.S. Government Accountability Office. Studies conclude that seller DPA increased the cost of ownership and real estate prices in and maintaining a higher delinquency and default rates.

ms opal

September 11, 2008, 2:02pm (report abuse)

I have to agree with John Adams. I too make a decent living but I can't afford the downpayment. Just because I can't afford the downpayment doesn't mean I can't afford the house. Now I do believe stricter regulations should be put into place for those who want to utilize the program, but not to just do away with it completely. I do wish to keep the money I do have saved just in case a problem does arrive with the house (painting, leakage, furnance, etc).

Also it's a dream for most single people who want to own a home (especially woman) who are not married

connie m

September 11, 2008, 6:24pm (report abuse)

ms opal - These programs were designed to help people that are unable to save for a down payment. You admit that you do have the ability to save money. Taking your situation as an example, shouldn't everybody with or without savings get DPA? You just need to save a little longer and you will have the down payment. In the mean time, home prices should come down even further without the existence of DPA keeping them inflated.

Buyer Agent

September 12, 2008, 4:39pm (report abuse)

HERE WE GO AGAIN! Most of these comments supporting DPA programs really make me think most of you are probably lenders wanting to do this crap again just to write loans - I never advise my clients to "stretch" to buy something they can't afford. (Isn't that irresponsible?) - If you can't save at least $6,000 to purchase a $200,000 house(based on 3% FHA loan), then you have no business buying a home to begin with - you don't have the backup funds to afford the emergencies like replacing HVAC, roof, and other maintenance and home repairs - Besides, one of the main reasons DPAs were eliminated was that FHA found the foreclosure rate to be about 80% higher on loans with down payment seller assistance verses FHA loans without. There was also concern about inflated property values as a result of the seller funded DPA programs. NOTE: Many homes (that were formerly purchased under DPA loans) I show to Buyers were not well maintained and many are foreclosures. I vote for NO DPAs!


September 12, 2008, 5:12pm (report abuse)

It amazes me as to the statements of some of the anti- DPA contributors. Jay: your statement from the GAO is quite outdated...if you look closer you will find that the GAO has also stated that HUD's numbers are skewed and without merit. The courts even stated the same over the past 3 years.

The program is a good program that provides an opportunity for the less fortunate.

As a professional in this industry you have a FIDUCIARY DUTY to YOUR CLIENT. The best interest of your client is not always the best interest of our government or the economy.

Economic hardship is the deciding factor whether someone defaults or not on their mtg, not DPA.

Dont blame DPA for the crisis. Blame the Realtors that conspired with their sellers to increase the purchase prices to offset their gift. Thats where the problems started.

RE: Buyers Agent

September 12, 2008, 5:50pm (report abuse)

Get out of the industry. You are completely uninformed. DPA didn't start to be used until the 3rd quarter of 2007. They haven't had time to get foreclosed on. Your proabely not a real estate agent, your proabely a property manager, You want people to live in the "rental reservation" forever.


September 13, 2008, 4:07pm (report abuse)

Once again, special interest, with support of legislators like Maxine Waters (super liberal socialist), will get HR 6694 passed in order to slap a quick fix patch on the lagging home sales. I'm so completely confident that every one of these posts that rabidly support DPA are from the people who stand to gain the most from it. These posts are almost exclusively from people who would use DPA to prop up their sales.


September 14, 2008, 9:26pm (report abuse)

I am a mortgage loan officer and have used DAPs for many first time homebuyers. The majority of first time homebuyers come to me with the ability to repay the debt, but with no means of financially affording the down payment & closing costs. These DAPs have worked remarkably well in assisting these usually young families get into their first homes. I've also used these programs for young couples that do have savings! Using a DAP allows them to retain some of their savings in the bank as a cushion for emergencies, making for a sounder loan!

Eliminating this program will prohibit many young families from having a safe & affordable home in which to raise their children. Just yesterday I spoke with a young woman who desparately wants to get out of the rental she is in - the landlord hasn't been paying the utility bills and they keep turning off her water. She's tired of one bad landlord after another & wants to own a home. At the moment I can't help her - no DAPs! Yes HR 6694


September 15, 2008, 10:31pm (report abuse)

Why do these people that need DPA assistance have no savings?? Did they jump the gun and have children before they could afford them? Do they have the ability to save for retirement? Do they have the ability to save for their children's education? Do they have the ability to save for a rainy day situation that could potentially cause them to lose the home which they saved nothing for? I had no family that would pay for my education or loan me the down payment for my home. But, now I find myself facing the real possibility of paying for all the irresponsible people that put nothing down on their homes and find it so easy to walk away from it. Owning a home is NOT a right, it is a priviledge for people who show that they have what it takes to be financially responsible by making responsible life decisions.


September 16, 2008, 1:49am (report abuse)

What a SCAM! The homebuilder's are charged a "fee" by AmeriDream and Nehemiah Corp, then the homebuilder can give their "donation" to the non-profit, who in turn gives the "donation" to the "poor" homebuyer, who in turn gives the money back to the homebuilder! THIS IS A SCAM!

I am calling you out Maxine Waters, Barney Frank, Al Green, Gary Miller, and Christopher Shays.

You better believe the daily show, youtube, local news, etc. are going to hear about receiving donations from AmeriDream and Nehemiah Corp, their lobbyists, and lobby companies they use.

I guess having 60% of FHA losses directly linked DPA programs doesn't even worry these scumbag DPA companies.

Everyone is onto you now, the blogs are aware.


September 16, 2008, 6:15am (report abuse)

Erik's Right.

Gary Miller is a scumbag builder mole in Congress.

Nehemiah has been a scam from day one. Realtors and so called mortgage professionals who promote this nonsense do so for their own benefit.

You clowns want 100% financing then go to Congress and try to get it honestly; but not with this sham. You're just self-interested. Get some ethics for crying out loud you are embarrasing yourselves.


September 16, 2008, 7:14am (report abuse)

Marcus you're an idiot.

Erin F

September 16, 2008, 11:48am (report abuse)

RE: ERIK - "I guess having 60% of FHA losses directly linked DPA programs doesn't even worry these scumbag DPA companies."

Not all DPA companies are "scumbags". I work for a DPA company and I really don't appreciate being called a "scumbag"

We are out there to help people! Have you ever stopped to think about some of the mortgage brokers out there who push some loans through that really shouldn't be approved in the first place?? The loan itself has NOTHING to do with DPA! Or what about some of the appraisers that up the value? That doesn't have anything to do with us either! Stop criticizing DPA companies when there are more parts to this foreclosure issue than us. Get your statistics straight and please stop the name calling, it's really not necessary and it's very uncalled for.

DPA Is Good

September 16, 2008, 6:13pm (report abuse)

The dataset used by GAO is not a random or representative sample of home purchases. The data set is restricted in a number of ways that bias the results towards finding a larger impact of SF DPA on default or claim. By analyzing loans that are riskier than a random sample from the onset, conclusions about SF DPA will be exaggerated. To illustrate this point we can compare the claims rates for SF DPA in the national sample and the MSA sample. The national sample includes borrowers from different parts of the country and therefore reflects diverse economic conditions, not just in their personal lives but in the areas in which they live. The claims rate for this group, the national sample, is 10 percentage points lower than for the MSA sample. This suggests that default rates are likely to vary considerable depending on the economic circumstances of the borrower as well as the area in which they are located. Larger, more diverse samples yield a truer picture of the average default rate.

Mr. Fulton

September 16, 2008, 9:59pm (report abuse)

My wife and i are trying to buy our first home and with out tis bill it will not happen we both have good jobs and work all the time and to me it seems to be the same old story lets make the rich richer and have the middle man pay for it i work in construction and i see would these rich yuppies put in to there homes i think the people who helped build this great country should have a right to own a small part of it


September 17, 2008, 11:40am (report abuse)

Saving DPA is one step closer to being a reality! Join me TODAY in calling some congress people to let them know how important this bill is to the American people and our economy. We have less than two weeks to make this our voices heard. Here are 3 very influential congress people that can have an impact on our progress.

Congressman Steny Hoyer of Maryland: 202-225-4131

Congressman Roy Blunt of Southwest Missouri: 202-225-6536

Congressman John Boehner of Ohio: 202-225-6205

Let’s make this happen!!!


September 17, 2008, 1:24pm (report abuse)

Right back at you realtor Ryan. I'm sure you are one of the greedy morons that were happy to slide people into homes they could not afford with a risky ARM and now you want to do it with DPA.

Mute point

September 17, 2008, 2:20pm (report abuse)

There is one aspect of saving DPA that seems to indicate lending practices are heading in the right direction again. That is, a large number of lenders have already given a very strong indication that they will not be interested in lending to people that want to use DPA. Finally, some hope of getting back to reality with sound lending practices.

Diana Craft

September 17, 2008, 2:40pm (report abuse)

I'm a national loan officer with PrimeLending, a PlainsCapital Company out of Dallas Texas. I work primarily with teachers, who are first-time homebuyers. Usually they have good credit histories and are more than responsible. It seems only logical that we would assist those who give back so much to society by making it easier to buy a house. Teachers, firemen, and policement are typically underpaid for the jobs they do. Seems like the down payment assistance program is a small thing we can do for these folks. HUD offers special programs for teachers, firemen, and policemen to buy foreclosed property. The down payment assistance seems like it would just be an extension of that program.

Diana Craft

RE: Diana Craft

September 17, 2008, 5:18pm (report abuse)

Why not fight for better pay for teachers, firemen and police instead of trying to promote sympathy programs like DPA? Honestly, wouldn't it be better if they could afford a home because the home is affordable? As for all the rest of the people who are "underpaid", what does that mean?


September 17, 2008, 6:20pm (report abuse)

Jovan.. I have been in Blunt's office several times over the past several weeks and believe they are onboard with the program as proposed in H R 6694. Thanks for putting his info out there as you are right he is key.


September 17, 2008, 7:27pm (report abuse)

In 2001 only 2% of FHA loans involved DPA, now over 1/3 do. Did poor people just not buy homes in 2001? Of course they did, with savings! All these DPA companies just skim off the top of these transactions. Let's be very clear, AmeriDream pays lobby companies:

Baker & Hostetler

Clark Consulting Federal Policy Group

Edwards, Angell et al

Evergreen Assoc

Potomac Partners DC

Womble, Carlyle et al

For over $200k, who then in turn lobby congress members with donations also. So not only do employees of AmeriDream bribe congress, the companies AmeriDream hires to lobby congress also have employees bribe congress. Then the lobby companies lobby congress.

Somehow people were able to afford homes before DPA companies starting scamming.

People working for DPA companies are criminals plain and simple. There is no way you can convince anyone with actual ethics that what you do resembles any sort of morals. DPA companies are bribing congress right now.


September 17, 2008, 7:58pm (report abuse)


All these agents disgust me in that they are suggesting poor buyers get into a loan at infinite leverage in a deflationary spiral. What happens when these people have to move, do repairs, or even have a disaster?! They have NO equity; the 3% is a sham as builders adjust prices, etc. to account for this. The market accounts for it as well; if everyone in America received a $100k housing allowance then all houses would adjust to that. This program is no different.

I can't believe these scumbags think its ok to put a homeowner in this position when housing is in such horrible shape. Homeowners need an equity cushion to absorb further property value losses. The poorest people have the least equity and the most leverage when it should be the other way around, how disgusting.

Erik - I Agree 100%

September 18, 2008, 12:38am (report abuse)

All these people support DPA soley because DPA supports them. I find it so completely comical that most of them pretend to support DPA for philanthropic reasons. The rest that support DPA try to use scare tactics arguing that it is the only thing keeping the economy from crumbling. What a joke!

Tony W.

September 18, 2008, 4:25pm (report abuse)

From HUD

Loans made to borrowers who rely on these types of seller-funded gifts perform very poorly. The foreclosure rates on these loans are more than twice those of all other home purchase loans insured by FHA. Moreover, FHA experiences higher loss rates from the sale of the properties associated with these particular foreclosures, a reflection of the overvaluation that occurs with these programs. The higher foreclosure rates represent a financial burden for FHA and taxpayers, but of greater concern, they hurt the families who lose their homes and the neighborhoods



September 18, 2008, 4:29pm (report abuse)

If you really cared, you would won't the seller to contribute directly to the buyer. Instead they won't to hide it, and the DPA companies make an easy $300 bucks. WHAT A SHAM!!!! SOCIALISM DOES NOT WORK. GIVING AWAY HOMES TO PEOPLE WHO CANNOT AFFORD THEM AND HAS NO VESTED INTEREST, IS HOW WE GOT HERE, YOU BUNCH OF DUMMIES.


September 18, 2008, 4:32pm (report abuse)

Whether you are for DAP's or against them, one fact remains. There are tons and tons of empty houses on the market and now is poor time to place barriers between sellers and potential buyers. After reading the above comments, I agree something needs to be done but by taking DAP away and not putting something viable in it's place, the market and real estate industry will continue to decline. I am a real estate agent who is holding on by the skin of my teeth right now and the so called tax credit for first time buyers, is not a viable substitution as it actually is a loan that has to be returned. For these reasons I am in support of HR 6694 with the idea other measures will be needed in the near future.


September 18, 2008, 5:02pm (report abuse)

gmack, You are right on the money! It is the economy which is at stake here, not the individual home buyer who can't afford the 3% b/c his income has been lapped several times by the cost of housing in this country. The ones on this site who are against DPA are "got miners", which are people who have their nice comfortable living and home, and begrudge those who can't do the same. I suppose some of you want HUD to step in and provide assistance for the less fortunate and stick you with the bill, is that it? DPA does the job without any skin off your nose; therefore I support it.

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