Targeted “Solutions”
Restore Homeownership
Downpayment assistance (DPA) is an enormously popular program due to the deficiency of responsible loan choices for low-to-moderate income Americans.
For those that can qualify for a mortgage, but don't have the downpayment, seller-financed DPA remains the only effective means
for making homeownership a reality. Until this void is filled, the entry-level home market will continue to struggle and property
values will continue to decline. H.R. 600 outlines a set of reforms that strengthens DPA while addressing previous concerns.
Risk-based pricing assures that DPA can be made available without any cost to taxpayers:
- Upfront mortgage insurance premium not to exceed 3%
- If FICO score exceeds 680, standard FHA Monthly mortgage insurance rates apply
- Monthly mortgage insurance of 1.25% if FICO score is between 640-680
- If FICO score is between 620-639, Monthly mortgage insurance amount will be set at a level that will not require taxpayer subsidy
- Homebuyers with a FICO score under 620 are unable to use DPA initially
- However, HUD Secretary can extend risk-based pricing for DPA borrowers with sub 620 FICOs in 2010 if it will pay for itself
Stiff penalties for appraisal abuse is a firm response to the concerns of some regarding inflated appraisals.
Homeownership education must be made available to prospective homebuyers, increasing the opportunity for sustainable homeownership and overall long term financial success.
Regulation for DPA providers ensures responsible standards for DPA processing and education.
Act now to support H.R. 600 that will put the American dream within reach for hard-working, credit-worthy Americans and stimulate the housing market. Use the tools on this site to demand that downpayment assistance be reformed.
