Effort Underway to Restore Down Payment Assistance Programs

Washington, DC — September 12, 2008
By: Ed Laiscell, Washington (DC) Informer

With the stroke of a pen in July, President George Bush in essence eliminated programs that could help hundreds of thousands of low-income or moderate-income families become homeowners. HR 3221, when signed by the President, contained a provision that removed down payment programs such as Nehemiah Project and AmeriDream.

"There were persons in the Administration that thought this was not a viable program," said Representative Al Green (DTexas), who was selected by Congresswoman Maxine Waters to spearhead the effort to restore the down payment assistance program through legislation.

Supporters of the programs are calling on lenders, loan officers, real estate agents, and others in the housing market to contact their Senators and Representatives to support the legislation. If President Bush does not sign the new bill soon, down payment assistance programs will expire Sept. 30. Green charges that it would have cost less for the federal government to amend down payment assistance programs than it does to bail out Fannie Mae and Freddie Mac.

"This legislation is necessary. There are persons who can afford monthly mortgage payments, but don't have enough money for down payments. This will help thousands if the legislation is passed," Green said.

"Down payment assistance programs are clearly needed at this time when the country is facing one of the worst housing crises." Green also pointed out that homeownership has a ripple effect on the economy "that we should not overlook."

Also addressing the sparse gathering on Wed., Sept. 10 in Senate Park across from the Capitol on Constitution Avenue was Dr. Ben Chavis, chairman of the Hip-Hop Summit Action Network (HHSAN); Scott Syphax, CEO of Nehemiah Corporation of America, and Joy Jamison, chairman of the National Association of Black Mortgage Brokers.

"On the issue of housing, particularly for African Americans, we have to gain greater economic control of our communities. One method is through home ownership. Even during this housing crisis, if Black people got the right information we could flip the script on this issue," said Dr. Chavis.

"That is why I'm supporting this particular initiative to restore down payment assistance. A lot of people who work can afford the monthly mortgage payment, but can't afford the down payment and down payment should not keep us from becoming homeowners."

Jamison's organization was started two years ago and has a database of more than 3,000 mortgage professionals in seven states. NABMB's mission is to empower and educate members and the community on mortgage products and the trends in the market. They also work diligently to communicate with legislators about the issues that affect the mortgage and real estate industry.

"It will take support from everyone in the industry and everyone in Congress to get involved with this program. All our members have to talk to their representatives. They have to actually go in and physically talk with them to let them know how important this issue is and ask them to get involved and support this legislation," she said.

J. Darrell Carrington, senior loan officer with Universal Mortgage and Finance, acknowledged there were foreclosures from homeowners who used down payment assistance programs, but charges that 45 percent of all foreclosures were investment properties and second homes.

"No one is talking about that. There may be a slight increase in foreclosures in one area over another, however I think overall the numbers are fairly consistent across the board," Carrington said.

"I believe we are removing another tool [down payment assistance programs] from the arsenal that can help low-income and moderate-income people become homeowners. Our whole purpose should be expanding opportunities so that people can live out the American dream, not restricting it or putting up additional barriers."

Ruth Lancaster, who once managed a mortgage office in Fort Washington, Md., said it would be "ridiculous to remove" down payment assistance programs. "When I first read the bill, HR 3221, I couldn't believe it [the removal of down payment assistance,]" Lancaster said. "I couldn't believe where it was placed, page 479. It had no relevance to what's going on in the bill. It was like someone just stuck it in there to sneak it by people."

She said she has written her senator and told them she wants them to support the legislation. "If we want to get rid of all this inventory on the market, we need every tool we can get to do that," she said.

Syphax said his organization has helped put more that a million families into homes through down payment assistance since its founding more than a decade ago. He noted that home ownership has a trickle down effect.

"Down payment assistance has tremendously empowered those families across the United States to catch their dreams. That's everything from providing a safe, secure household for their family and children to being able to capture some of that equity wealth to start businesses, send children to colleges, and improve their own professional training. Homeownership is that key to a better life," Syphax said.

"The congress' action and president's signature of this bill (HR3221) closed that door for too many families, especially communities of color and low-income people in this country."

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

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