Is This a Hail Mary?

It was brought to my attention this afternoon that Down Payment Assistance is going for the hail mary pass.  The Washington Post wrote up a big story on Down Payment Assistance (DPA) and it appeared this morning.  The story itself is worth taking a quick look at, and you can see it here.  The more interesting part of this story is that Texas Representative Al Frank (supporter of DPA) took this article and circulated it to his colleagues.

Here is a copy of the letter he included with a copy of the article:

CONGRESS MUST SAVE DOWNPAYMENT ASSISTANCE PROGRAMS BEFORE OCT. 1!!

Dear Colleague,

I would like to call your attention to the article below about the impact of the elimination of downpayment assistance programs (DPA) on October 1, which appeared in this morning’s Washington Post. The complete elimination of these programs would be catastrophic at a time when we need qualified first time homebuyers to purchase homes to stimulate the economy, stabilize home prices, and revitalize neighborhoods that are damaged by the foreclosure crisis. Because the downpayment assistance is a gift that will never be required to be repaid, we can help first time homebuyers stimulate the mortgage market, while ensuring they have immediate equity in their homes and a safe, fixed rate mortgage.

I have introduced legislation to allow the benefit of DPA to remain in existence for qualified homebuyers who need the help, while ensuring DPA remains a program run by credible nonprofit charities. My legislation, H.R. 6694, will set FICO score eligibility thresholds for DPA participants, impose risk-based pricing premiums, require home ownership counseling is made available to gift recipients, and better regulate entities that provide downpayment gifts. These reforms will significantly reduce the incidence of defaults and, hence, minimize risks DPA might pose to the FHA insurance fund. In fact, I crafted H.R. 6694 to be budget-neutral based on HUD data, which means that allowing these programs to continue will have no negative impact on the taxpayer, but will benefit all Americans by helping to stimulate the housing economy.

Please tell our leaders in Congress that we must ensure the language in H.R. 6694 is enacted before we adjourn because seller-funded downpayment assistance programs are a necessary component to the recovery of our economy. Please encourage the leadership to keep the language of H.R. 6694 in the stimulus bill discussions this weekend.

Sincerely,

Al Green

Will They Go For It?

I really have my fingers crossed that they will.   However, statistically speaking, FHA loans with down payment assistance have been much more likely to result in foreclosure.  The good news is Representative Green has addressed some of these issues with the minimum FICO score requirements in his proposed new bill (6694).

Give It Time

It probably won’t take long to get this bill passed.   Most are expecting lawmakers to have a solution by the end of this weekend.  It’s obvious that Secretary Paulson and Fed Chairman Bernanke are urging the government to take action and take action quickly.

How Will You Know?

The fastest way is through the web.  If you’d like to see it ASAP, you can likely refresh MarketWatch.com.  If you’d rather not make this your mission, you could just follow me.  I’ll be sure to send an alert as soon as I hear about it.  Much like I sent out an alert on this post before I had time to write it up!

Photo Kudos

Tagged as: 6694, al green, bail out, Bill, congress, Down Payment Assistance, DPA, financial, financial plan