New Administration Inspires Hope for DPA

Washington, DC — January 26, 2009
By: By Amilda Dymi, National Mortgage News

Rep. Al Green, D-Texas, has introduced H.R. 600, a new bill that would reinstate the controversial seller-funded downpayment assistance banned on last Oct. 1, despite data its proponents said showed it had helped over one million families become homeowners.

The crisis has brought back to the spotlight the need for affordable financing and downpayment assistance for single-family housing mortgages. According to affordable housing and DPA advocates, if passed, the new bill will enable an estimated 300,000 qualifying homebuyers annually. Currently, effective Jan. 1, the DPA requirement on Federal Housing Administration-insured loans is 3.5%.

FHA officials, however, have said delinquencies on DPA loans are much higher than on other FHA products.

H.R. 6694, a similar bill that was adopted by the House Financial Services Committee through a voice vote last year, did not take off as hoped by DPA supporters. Expectations that the Obama administration will help reinstate DPA appear to be high.

"This bipartisan plan will encourage creditworthy homebuyers to enter the market and will do so without adding to the taxpayer's burdens," said Ann Ashburn, president of AmeriDream Inc. of Gaithersburg, Md., a veteran provider of privately funded DPA that also offers homebuyer education, loss mitigation counseling and community development.

"H.R. 600 will also give a sorely needed boost to home goods stores, mom-and-pop shops, construction companies and cash-strapped local governments that depend on a stable housing market."

Scott Syphax, president and CEO of the Nehemiah Corp. of America, Sacramento, Calif., a DPA pioneer and supporter, applauded the bill that helps broaden homeownership opportunities for borrowers who qualify for Federal Housing Administration-insured loans without using government or taxpayer dollars.

"With foreclosures on the rise and banks maintaining their stranglehold on credit," he said, DPA can play an important role in the market's recovery.

"Through H.R. 600, DPA offers a simple solution that can empower thousands of worthy families to take advantage of depressed home prices therefore reducing the glut of homes on the market. Further, it does so without spending a single government or taxpayer dime according to the Congressional Budget Office."

Mr. Syphax said seller-provided downpayment assistance is a source of opportunity for responsible, sustainable homeownership in times when the housing market is crumbling.

H.R. 600 was introduced on Jan. 16.

Co-sponsors of the legislation are Reps. Maxine Waters, D-Calif., and Gary Miller, R-Calif.

"H.R. 600 will only be as successful as its supporters around the country want it to be," Ms. Ashburn said. The AmeriDream executive is encouraging both the industry and the public to voice their support to Congress.

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For additional information, please contact Shelley Mitchell, smitchell@nehemiahcorp.org, 916-231-1999.

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