I recently emailed Congressman George Miller 7th District to voice my opinion on bringing back seller paid down payment assistance programs. This was his response on Feb. 3rd, 2009
Dear Mr. Phillips:
Downpayment Assistance Programs are intended to assist families who are unable to make a downpayment obligation themselves when purchasing a home. These programs have helped many people start on the path to homeownership and have helped millions of families over the years.
As you probably understand, Downpayment Assistance Programs (DPA) have not been eliminated by Congress. However, some changes were made to the Downpayment assistance rules when Congress passed the Housing and Economic Recovery Act of 2008. DPA programs work in conjunction with the Federal Housing Authority (FHA) insured home loans. If you are using an FHA insured home loan as a buyer, you are required to contribute a small amount of the downpayment amount - 3.5% of the total purchase price. Contributions from sellers can still help buyers with their down payment, just not that first 3.5%.
I understand that you have concerns about some of these recent changes to the DPA program. HR 6694, the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008, would make some exceptions to the rules above, including allowing some buyers to accept downpayment contributions from the seller. This legislation recently was considered, and passed, by the Financial Services Committee and is now awaiting consideration by the full House of Representatives. It is unlikely, however, that there will be sufficient time to consider this bill before the end of the current legislative session.
Although the current legislative session will soon come to an end, it is possible the new Congress will look at this issue again next year. I will certainly consider your views should the issue come before the full House for consideration.
Member Of Congress, 7th District
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