My New Blog

President Signs Bill Locking Out 40% of FHA Loan Candidates, Further Slowing Economy

To add insult to injury to the dwindling middle class of America, this week the President signed H.R. 3221, Housing and Economic Recovery Act of 2008, into law. This bill contains a provision which forbids FHA from insuring mortgages in which the borrower’s down payment comes from a private down payment assistance provider, beginning October 1, 2008.

Many are concerned that Congress has chosen not to address the need for DPA in this bill, even though HUD estimates that almost 40% of all down payment funds comes from DPA sources. The elimination of a large segment of the housing market such as that will have devastating results. It also means that more than 300,000 working class families will be locked out of homeownership in the next year alone. DPA has the overwhelming support of Congressional Black and Hispanic Caucus Members, Mortgage Bankers Association, U.S. Conference of Mayors, National Association of Home Builders, National Association of Counties, and many, many others.

The bill which is hailed as housing aid helps only a small "needle in a hay stack" few, yet absolutely knocks out 40% of FHA candidates from purchasing homes a further blow to the already staggering economy