by Alice Alvey

HUD has extended the comment period for the Downpayment Assistance Programs until August 10, 2007! The comment period was originally set to expire on July 10th. This will give you a few more weeks to send in a comment to state your opposition to the elimination of the DAP’s . At the current time the federal website www.regulations.gov that is used for responding to proposed rules does not show this item. Instead you can use a consumer action group site to submit a comment to your congressman, senator and HUD such as: http://takeaction.ahaanow.org/ahaa/home/

If you would like more data and statistics, Ameridream established a website when the IRS ruling was issued that threatened the program that provides additional information.. This site isn’t specific to the proposed rule but has data about the performance of loans with down payment assistance: http://www.supportdownpaymentassistance.org/

As an industry we seem to be quite polarized on the issue of the DAPs and it can be described simply as a good thing for sales and a problem for risk managers. After many years in operations I am a firm believer that operations must find solutions for sales and not road blocks. Proper risk management of this program can be a great compromise that keeps the doors open for consumers who deserve homeownership. The first step is to get HUD back to the drawing board and come up with a proposal that works for consumers and lenders

While the debate continues you can still buy a home using FHA with downpayment assistance however, I recommend the following:

• always print (or save a scanned copy of) the HUD website screen shot showing the DAP is NOT listed as revoked on the date the purchase agreement was signed: http://www.hud.gov/offices/hsg/sfh/np/irstatus.cfm

• always print the IRS website page showing that the DAP is still listed as a non-profit using this site: http://apps.irs.gov/app/pub78

Follow these instructions:

• Enter search data and click "Search"
• Click "Search for Charities" under "Charities & Non-Profits Topics"
• Click "Recent Deletions from Cumulative List" under "Additional Information"
• Click name of organization if that name appears on list of names under "Recent Deletions from Cumulative List (Publication 78)"

These recommendations are based on HUD mortgagee letter 2006-13.

Can Other Non Profits Help Your Business?

While you are checking on the down payment assistance information at HUD’s website, you may find it interesting to know the names of non-profit organizations that provide secondary financing for FHA loans: http://www.hud.gov/offices/hsg/sfh/np/np_hoc.cfm

FHA Happenings:

• Mortgage U FHA Fundamentals GRAND RAPIDS!!! September 19th at Western Michigan University Beltline Campus!
• Mortgage U FHA Fundamentals August 7 Bingham Farms,
• Mortgage U FHA Advanced August 8 Bingham Farms

HUD Philly at Macomb Community College – Free! FHA Update Seminar, presented by the Philadelphia Homeownership Center. The topics covered by the seminar will include the new FHA Appraisal Protocols, Lender Insurance, Streamline 203k program, Energy Efficient Mortgages, HECM (Reverse Mortgages), etc. Quality Assurance & REO Topics will also be covered. Register at: http://www.hud.gov/offices/hsg/sfh/events/pmi082207.cfm