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Monday, June 9, 2008
Contact: Henry Fawell
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HUD’s Efforts to Eliminate Downpayment Assistance Will Hurt Qualified Homebuyers

Gaithersburg , Md. – Ann Ashburn, President of AmeriDream, Inc., issued the following statement regarding Federal Housing Administration Commissioner Brian Montgomery’s remarks today at the National Press Club seeking to eliminate charitable down payment assistance funded in part by home sellers. These programs operate in accordance with current law and HUD guidelines and have helped more than one million low and moderate income HUD-approved families and individuals buy their own homes.

“In addition to jeopardizing homeownership opportunities for qualified low to moderate income homebuyers, the Administration’s position does not comport with the facts.

“First, the Administration fails to disclose that losing one third of the FHA’s business that uses downpayment assistance will deny annually over one hundred thousand qualified moderate income, minorities, first-time homebuyers and women-headed households from becoming homeowners. The absence of so many first time homebuyers will further increase new home inventory, slow down home sales, increase the risk of foreclosures and further de-stabilize the housing market.

“Second, the Administration failed to disclose today that FHA loans with downpayment gift letters over the long term will result in an $11 billion increase to FHA, which is three times the required amount for solvency, according to HUD’s own actuarial review.

“Third, the Administration fails to recognize the consensus and desires of a bipartisan coalition in Congress, tens of thousands of members of the public and various leaders of the housing sector, including the Mortgage Bankers Association, the U.S. Conference of Mayors, the National Association of Counties, and the National Association of Homebuilders. Congress has been working in a bipartisan manner to develop effective and reasonable reforms. We are pleased that the House of Representatives passed such a proposal on May 8, 2008. We encourage the House and the Senate to agree on consensus language to send to the President.”

BACKGROUND: Charitable downpayment assistance funded in part with seller participation has allowed homeownership to grow without using taxpayer dollars. To date, more than one million families and individuals have utilized this downpayment assistance, generating nearly $10 billion in home equity for those families between 2000 and 2005. AmeriDream has provided more than 250,000 gifts to HUD-approved aspiring homeowners, approximately 80% of whom were first-time homebuyers. AmeriDream also has helped educate 60,000 homebuyers through homebuyer education courses, helped 1,200 homeowners retain their homes when confronted with mortgage difficulties, and committed over $30 million to affordable housing development in local communities.