FHA Down Payment Assistance: An Opinion From Someone With Facts

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As I spend time reading all the websites that seem to rejoice over reciting every detail of the downfall of the mortgage industry, I see many comments bringing attention to HUD’s efforts to get rid of seller paid down payment assistance. I usually find that these comments are being made by those with no access to any real information other than the misleading and often inaccurate numbers issued by the political appointees at HUD.

I found it refreshing to read a July 23, 2008 opinion column on the Atlanta Journal-Constitution website written by Robert Motley, the CEO of Pine State Mortgage in Sandy Springs, GA… In other words, a column written by someone in the trenches who actually sees how FHA mortgages with down payment assistance perform. Someone who would be held accountable by HUD for excessive defaults. You can find the column, entitled “Keep The Down Payment Assistance Program” on the ajc.com website. It is very short and to the point. I encourage everyone to take a look.

Unfortunately, it may be just a little too late as House Financial Services Committee Chairman Barney Fran, D-Mass., recently told The Washington Post (registration required) that the House has agreed to accept Senate provisions that ban seller funded downpayment assistance on FHA loans and impose a 12-month moratorium on the charging of risk-based premiums by the FHA. The White House has also dropped opposition to the bill, so it is on the fast track to passage. Looks like politics may win out over reality once again.