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July 2007

Welcome To AmeriDream’s Newsletter

In This Issue:

  • Ask AmeriDream
  • HUD Extends Public Comment Period for Proposed Rule
  • National Organizations Advocate Support for DPA
  • Most Americans believe "affordable housing" is a high priority
  • Homebuyer Ed 101

Q: What is the proposed rule by HUD?

A: It’s important for homebuyers and lenders to recognize this is a “proposed rule” and as such, has no effect today on a nonprofit’s or others' ability to provide down payment assistance to qualified homebuyers. AmeriDream continues to operate "business as usual."

At a time when the nation’s housing market is in a crisis and finding a safe and affordable mortgage loan is a major challenge for most families hoping to become homeowners, the proposed HUD rule seeks to eliminate privately-funded down payment assistance programs that have been credited with helping more than one million families become homeowners over the past decade.

Q: What could the impact be if DPA goes away?

  • Reduce homeownership for hard-working families including minorities, immigrants, women, and single-parent households most in need of financial help.
  • Eliminate 100,000 homebuyers annually from the housing market.
  • Reduce the number of 1st time homebuyers entering the housing market; creating more supply and less demand.
  • Reduce business for lenders, real estate agents, home inspectors, appraisers, and thousands of others who work in residential home building and the remodeling industry.

Q: How can I support Down Payment Assistance Programs?

A: Right now, the proposed rule is in a phase known as a public comment period. The general public, housing and lending professionals, and consumer advocates have an opportunity to express their thoughts regarding the impact of this rule.

We encourage you to take 60 seconds and comment now!  www.takeaction.ahaanow.org Over 13,390 individual comments have been submitted supporting DPA and requesting HUD to withdraw the proposed rule.  

The Department of Housing and Urban Development (HUD) has extended the deadline for public comments for an additional 30-day period for its proposed rule on Standards for Mortgagor’s Investments in Mortgaged Property.  The extension was issued in response to a request from Rep. Maxine Waters, D-CA, chair, of the House Financial Services Subcommittee.  The subcommittee held a Congressional hearing on the proposed rule, June 22.

Rep. Maxine Waters and subcommittee member, Representative Gary Miller,
R-CA, suggested adding language to a FHA reform bill that would include privately-funded DPA.  None of the 10 lawmakers present at the hearing expressed support for HUD's plan to end the DPA program

Representatives of the US Conference of Mayors have joined a list of organizations that support privately funded DPA programs. In Los Angeles during its annual meeting, June 22-26, the USCM advocated for Congressional hearings that would help lawmakers gain greater insight regarding DPA programs and urged Congress to increase regulations that would allow DPA programs to support efforts to increase and sustain homeownership.  Other organizations that passed resolutions or submitted letters of support include the National Association of Home Builders.

According to a recent Zogby America poll, 90 percent of Americans believe providing affordable housing is a high priority and more than half believe that the nation’s housing policy is on the wrong track to achieving “a decent home and suitable living environment for every American family.”

Many say, affordable housing will affect the way they vote. In fact, 75 percent said that presidential candidates’ ideas for providing more affordable housing were important in determining for whom they would vote. Sixty-nine percent said they would be more likely to select a presidential candidate who articulated his or her detailed plan for providing affordable housing.

The poll of 1,200 adults surveyed by telephone was commissioned by a coalition of public, private and nonprofit advocacy groups.

The housing affordability crisis has a dramatic effect on the quality of life of millions of families. It affects middle-income individuals such as teachers, police officers, firefighters and other public servants, as well as millions of Americans in the service and retail industries.

Today, many of these hard working families are forced to commute long distances, live in housing that does not meet their needs, or pay far too great a share of their incomes for housing.

Do you know your credit score?

A credit score is a number that is calculated based on your credit history to give lenders a simpler "lend/don't lend" answer for people who are applying for credit or loans. This number helps the lender identify the level of risk they may be taking if they lend to someone. While the same end result can come through reviewing the actual credit report (which lenders usually do), the credit score is quicker and less subjective. The system awards points based on information in the credit report, and the resulting score is compared to that of other consumers with similar profiles. With this information, lenders can predict how likely someone is to repay a loan and make payments on time.

Although there are several scoring methods, the score most commonly used by lenders is known as a FICO because of its origins with Fair Isaac and Company. Fair Isaac is an independent company that came up with the scoring method and software used by banks and lenders, insurers and other businesses. Each of the three major credit bureaus (Experian, Equifax and TransUnion) worked with Fair Isaac in the early 1980's to come up with the scoring method.

The three national credit bureaus each have their own version of the FICO score with their own names. Equifax has the Beacon system, TransUnion has the Empirica system, and Experian has the Experian/Fair Isaac system. Each is based on the original Fair Isaac FICO scoring method and produces equivalent numerical results for any given credit report. Some lenders also have their own scoring methods. Other scoring methods may include information such as your income or how long you've been at the same job.

According to FICO, the credit scoring ranges from 300 to 900, with a score of 900 being the absolute best score an individual can attain. On average, 700 and above is considered “excellent” scoring: 680 – 700 are “very good;” 640 – 680 are “generally acceptable;” 620 – 660 are “marginal;” below 620 are considered with caution.

In order to purchase a home without using various special lending programs, depending on your lender, you need a credit/score of at least 640. The lower the credit score, the more difficult it will be to get a loan or you may have to pay a higher interest rate and/or other penalties.

"Homeownership – it wouldn't have been possible without assistance from a DAP. There was just no way to afford it."

David, Cleveland, OH

If you have only one match and you walked into a room where there was an oil burner, a kerosene lamp, and a wood burning stove, which one would you light first

- Solution is located on the bottom of the page -

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The Match