Reviving Down-Payment-Assistance Program Faces FHA Opposition
The U.S. Federal Housing Administration, facing as much as $14 billion in losses from a down-payment-assistance program terminated in 2008, is seeking to block efforts to bring it back. A bill introduced by U.S. Representative Al Green, a Texas Democrat, and supported by the U.S. Conference of Mayors, would restart a program that allowed nonprofit groups to donate the 3 percent down payment low-income buyers needed to get FHA-insured mortgages. Sellers, often homebuilders, then contributed that amount, plus a fee, to the nonprofits. The plan, which funded the purchase of more than 1 million homes over 10 years, was halted by lawmakers concerned about rising defaults and evidence that some buyers were overcharged.