Compromise possible in ban on down-payment assistance ban

September 11, 2008
By: My Central Jersey

Chairman of the House Financial Services Committee, Barney Frank, has discussed publicly the fact that he has negotiated an agreement with HUD Secretary Steve Preston that will provide for the continuation of privately funded down-payment assistance.

The agreement allows HUD to impose risk-based pricing on downpayment assistance transactions which provides Secretary Preston the fiscal protection he seeks for the FHA insurance fund.

According to an Inman News article published Tuesday, Chairman Frank is quoted as saying "The FHA loved the ban on down-payment assistance (but) hated the ban on risk-based pricing," Frank said at Saturday's hearing. "That seemed to me to offer an opportunity. So (HR 6694) will replace both bans with middle ground -- and it will pass the House, I can guarantee you. What you want to do now obviously is talk to your senators. We think it will go through there -- it has the approval now of the Secretary of HUD."

The Nehemiah Corp., a California-based nonprofit organization that has operated in New Jersey and other states for years, has been very active in encouraging and organizing grassroots support for lifting the ban on down-payment assistance. Nehemiah's sole purpose is to collect tax-deductible contributions from homesellers of up to 4 percent of the sales price of their home and to turn around and make grants of similar amounts to homebuyers to cover down-payment or closing costs.

"Thanks to the advocates of down-payment assistance, there is significant momentum in this direction. Nehemiah urges all supporters to continue their campaign to save DPA by contacting their Senators and request a swift passage of pro-DPA legislation," said a mass e-mailing from Nehemiah Corp. today.

On the Web: www.DPAGroundSwell.org

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

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