The Spirit of Giving

So Nehemiah and AmeriDream are suing HUD for banning DPA (down payment assistance). Let’s reivew what happens with DPA “gifts”:

The program works this way: Once contacted by a lender, Nehemiah sends a gift covering the homebuyer’s down payment. Average gift: $4,000. The seller of the home then reimburses Nehemiah, plus a fee.

HUD’s complaint is that often the sellers, despite being discouraged by Nehemiah, add those costs to the sale price. The agency says this leads to greater financial strain on the homebuyer, and more defaults for HUD, whose Federal Housing Administration insures the mortgages. “Loans made to borrowers who rely on these types of seller-funded assistance perform very poorly,” the agency said in its final decision banning the program.

If Nehemiah and AmeriDream are as devoted to consumers as they say they are, maybe they could use their corporations to help people in ways that don’t involve jacking up housing prices.

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