Congress Is Set to Limit Down-Payment Assistance

Washington Post (07/22/08) P. D1; ElBoghdady, Dina
Congress is expected to pass a broad housing package this week that includes language banning seller-funded downpayment-assistance programs. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, says the his chamber will cede to the Senate's effort to end this type of aid--which the Bush administration has wanted to do for years. The Federal Housing Administration says borrowers who obtain down-payment assistance from sellers go into foreclosure at nearly three times the rate of borrowers who pay out of their own pockets. Over the past decade, more than 500,000 people bought homes using a government-insured loan and a seller-funded down payment, including about 79,000 in 2007.