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FOR IMMEDIATE RELEASE:
Wednesday, April 9, 2008
Contact: Henry Fawell
(410) 545-5830

HUD Misleading Congress and the Public on Key Charitable Downpayment Assistance Program

Gaithersburg, Md. – Ann Ashburn, President & CEO of AmeriDream, Inc., today challenged testimony by the U.S. Department of Housing & Urban Development’s (HUD) Brian Montgomery and defended charitable downpayment assistance (DPA) programs funded in part by seller participation. HUD, which is attempting to eliminate these valuable programs as part of the 2008 housing stimulus package, testified before the House Committee on Financial Services today.

“HUD is entitled to its own position, but it is not entitled to its own facts. In attempting to convince Congress to eliminate charitable DPA programs, HUD ignores a public and independent report by the General Accounting Office stating that ninety-four percent of homebuyers using seller-funded DPA pay their mortgages without undue difficulty.

“Moreover, HUD refuses to release to Members of Congress and the public the internal data on which it bases its proposal to eliminate charitable DPA, a proven program that has helped more than one million low and moderate income Americans become homeowners, including many minorities and women.

“Finally, HUD misleads Congress on three key points.

  • First, the congressionally mandated independent actuarial review dated October 2007 contradicts Commissioner Montgomery’s claim about the impact of DPA on the fund. According to the review, the fund will realize over $1 billion per year and be at three times the required amount legislatively mandated.
  • Second, HUD argues that claim rates for FHA-insured loans doubled as downpayment assistance programs grew. To the contrary, downpayment assistance programs account for a larger share of FHA-insured loans today because FHA lost considerable market share to zero-downpayment programs offered in the private mortgage market.
  • Third, contrary to Commissioner Montgomery’s statement that the easy solution is to eliminate DPA, America’s economy, housing market and low to moderate income families cannot afford such a convenient policy.

“Charitable DPA funded in part by seller participation works. The program has helped more than one million families and individuals become homeowners since 2000 -- without using tax dollars -- and has generated more than $24 billion in economic benefit.

“Charitable DPA providers have operated for more than a decade in accordance with current law and HUD guidelines. We welcome the opportunity to operate in a healthy regulatory environment. We enjoy strong bipartisan support which makes us credible, responsible and a viable component to the housing recovery and to homeownership opportunities for the low-to moderate income, working class, minorities, women headed holds and first time homebuyers.

“HUD refuses to work with us to strike that balance to satisfy everyone. Since 2004, we and Members of Congress are working to regulate and not eliminate a valuable housing assistance program.”

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