Notes and Opinions from one of Arizona's Most Trusted Loan Teams

Congress is expected to pass a broad housing package this week that includes language banning seller-funded down-payment-assistance programs. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, says his chamber will cede to the Senate's effort to end this type of aid--which the Bush administration has wanted to do for years. The Federal Housing Administration says borrowers who obtain down-payment assistance from sellers go into foreclosure at nearly three times the rate of borrowers who pay out of their own pockets. Over the past decade, more than 500,000 people bought homes using a government-insured loan and a seller-funded down payment, including about 79,000 in 2007.
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From "Congress Is Set to Limit Down-Payment Assistance"
Washington Post (07/22/08) P. D1; ElBoghdady, Dina

The Bill passed the Senate in a rare Saturday session last week. The President is expected to sign it into law very quickly. This has been coming for some time. FHA/HUD has tried to eliminate these programs on their own and failed in lawsuits from Nehemiah and Ameridream. It looks like they have gotten Congress to eliminate the seller-funded programs for them. We'll keep you posted.  JL