|For Immediate Release:
September 16, 2008
||CONTACT: Henry Fawell
National Association of Realtors Endorses Downpayment Assistance
Bipartisan legislation, H.R. 6694, would reauthorize downpayment assistance
GAITHERSBURG, MD – The National Association of Realtors (NAR), on behalf of its 1.2 million members, this week endorsed H.R. 6694, legislation to reauthorize downpayment assistance programs (DPA) that were banned by the Bush Administration in July. Downpayment assistance funded in part by sellers has helped more than one million low and moderate income families and individuals buy their own homes since 2000. These homebuyers have met all of HUD’s rigorous mortgage qualifications and have received a safe, long term, fixed interest rate mortgage with 94% of these recipients remaining successful homeowners after three years, according to a GAO report. Unfortunately, the program will be eliminated effective October 1 st. Additional information on H.R. 6694 can be found at http://www.supporthomeownership.com/
In a letter dated September 15, 2008, NAR President Richard F. Gaylord stated, ”The National Association of Realtors strongly supports downpayment assistance programs. The ability to afford the downpayment and settlement costs associated with buying a home remains the most challenging hurdle for many homebuyers. Providing homebuyers this kind of assistance can be a paramount factor in determining their ability to purchase a home.”
A copy of the NAR letter can be viewed at http://supporthomeownership.com/uploadedfiles/NAR-HR-6694-Support-Letter.pdf
“We recognize and commend the local real estate agents across the country for voicing their support to protect a program that helps them fulfill the dream of homeownership for their qualified homebuyers,” said Ashburn. “Realtors and other housing industry professionals can contact their representatives in Washington through http://www.supporthomeownership.com. Tell them that a vote for H.R. 6694 is a vote for a stronger housing market.”
H.R. 6694, sponsored by Congressman Al Green (TX-9), would reinstate FHA seller downpayment assistance for persons with certain credit scores by establishing three classes of eligible barrowers:
- Those with FICO scores above 679 will be allowed FHA seller downpayments under current HUD guidelines.
- Those with FICO scores of 620 through 679 will pay a risk-based mortgage insurance premium to cover their possible defaults in the amount of 3.0% of the original principal for a single premium AND 1.25% of the principal balance as an annual premium
- Those with FICO scores of less than 620 who may be deemed as eligible by HUD for FHA seller downpayments will be subject to HUD-established risk-based pricing.
H.R. 6694 will also create an on-time payment incentive based upon a refund of premiums paid in excess of normal premiums if the borrower makes on-time payments for a specific number of years and pays the mortgage obligation in full. If these requirements are met, the borrower will receive a refund in the amount of the difference between the amount normally paid and the amount actually paid.
H.R. 6694 is co-sponsored by U.S. Reps. Maxine Waters (CA-35), Gary Miller (CA-42), Christopher Shays (CT-4), Dennis Cardoza (CA-18), Andre Carson (IN-7), Lacy Clay (MO-1), Emanuel Cleaver (MO-5), Eddie Bernice Johnson (TX-30), Barbara Lee (CA-9), Doris Matsui (CA-5), Bill Pascrell, Jr. (NJ-8), Steven Rothman (NJ-9), Albio Sires (NJ-13), Lee Terry (NE-2), Patrick Tiberi (OH-12), and Charles Wilson (OH-6).