I have read pros and cons over the past few of the elimination of Down Payment Assistance Programs.  There's one thing that hasn't been discussed that in my opinion causes this change to be worthless at best and dangerous at worst.

The reason DPA programs like Nehemiah and Ameridream were able to flourish for so long is that gift funds on FHA loans can come from anywhere.  Unlike Fannie and Freddie's rules that the gift can only be made by a relative, FHA has no restrictions on who can provide the funds except that it can't come directly from the seller.  Therefore, all the DPA programs did was provide a nice, safe, above board way for these gifts to happen. 

Well, with this law enacted today, they eliminated these companies, but did not do what was fundamentally necessary to change the program--ie, make gift funds required to come from relatives.  All they did was increase the need for Guidos (my name for all illegitimate companies that profit off good intentions) who instead of charging a reasonable $499 processing fee, will charge whatever the market will bear (and even worse, take what is currently full disclosure and make it a behind the scenes scenario rife with potential for abuse). 

So, Congress, thank you for your attempt to help make the FHA program better, but you've either gone too far or not far enough.  Either way, you've done an injustice to affordable housing and programs that can help fulfill the American Dream.  Here's hoping you fix the problem before it actually becomes a problem!