AmeriDream: Downpayment Assistance Programs Shouldn't Burden the U.S. Taxpayer
GAITHERSBURG, Md., June 1 /PRNewswire-USNewswire/ -- Ann Ashburn, President of AmeriDream, Inc., today responded to the U.S. Department of Housing & Urban Development's announcement that certain organizations may use the federal $8,000 first-time homebuyer tax credit to offer government-subsidized downpayment assistance (DPA) to first-time homebuyers in need of a downpayment.
"We firmly believe in providing downpayment assistance to creditworthy homebuyers, however HUD's policy saddles the U.S. taxpayer with an unnecessary fiscal burden and saddles first-time homebuyers with more debt. It is difficult to rationalize how homeowners are better off borrowing potentially more than 100% of the purchase price of their homes rather than using DPA funded in part by sellers to create immediate equity in their homes that does not have to be paid back. In addition, HUD's plan proposes no underwriting standards, no appraisal standards, and has no provisions to prevent borrowers from taking on debt beyond their means. Lastly, this taxpayer-funded subsidy will last only a few months, when the housing market needs a long-term DPA solution.
"We believe there is a better alternative in Congress. H.R. 600 establishes a privately-administered DPA program that provides safeguards for homebuyers and that strengthens the housing market. Unlike HUD's proposal, DPA gifts under H.R. 600 do not have to be paid back. This legislation encourages responsible homeownership by requiring that DPA recipients be offered homebuyer education courses, implements tougher credit requirements for DPA recipients, strict FHA underwriting guidelines, and stiff penalties for improper home appraisals.
Finally, homebuyers using DPA under H.R. 600 could use their $8,000 tax credit to bolster their financial security through, for example, paying off high interest credit card debt.
"HUD's criticisms of DPA funded in part by sellers refer to a program that no longer exists and that no one seeks to reinstate. H.R. 600 would replace that program with one that makes responsible homeownership a reality for millions more qualified homebuyers."
H.R. 600 is sponsored by Reps. Al Green, Maxine Waters, and Gary Miller. A broad coalition of organizations H.R. 600, including the National Association of Homebuilders, the U.S. Conference of Mayors, the Congressional Black Caucus, the Congressional Hispanic Caucus, and the Labor Council for Latin American Advancement. Learn more about H.R. 600 at www.ameridream.org.
BACKGROUND: AmeriDream, a 501(c)(3) charity, was established in 1999 to provide housing-related programs to low and moderate income individuals and families. AmeriDream provides a wide range of programs, including homebuyer education, loss mitigation counseling, community development, and privately-funded down payment assistance. These programs are provided at no cost to the taxpayer. AmeriDream not only seeks to help families purchase homes, but also provide them with the education and other resources needed to be responsible homeowners.
SOURCE AmeriDream
"We firmly believe in providing downpayment assistance to creditworthy homebuyers, however HUD's policy saddles the U.S. taxpayer with an unnecessary fiscal burden and saddles first-time homebuyers with more debt. It is difficult to rationalize how homeowners are better off borrowing potentially more than 100% of the purchase price of their homes rather than using DPA funded in part by sellers to create immediate equity in their homes that does not have to be paid back. In addition, HUD's plan proposes no underwriting standards, no appraisal standards, and has no provisions to prevent borrowers from taking on debt beyond their means. Lastly, this taxpayer-funded subsidy will last only a few months, when the housing market needs a long-term DPA solution.
"We believe there is a better alternative in Congress. H.R. 600 establishes a privately-administered DPA program that provides safeguards for homebuyers and that strengthens the housing market. Unlike HUD's proposal, DPA gifts under H.R. 600 do not have to be paid back. This legislation encourages responsible homeownership by requiring that DPA recipients be offered homebuyer education courses, implements tougher credit requirements for DPA recipients, strict FHA underwriting guidelines, and stiff penalties for improper home appraisals.
Finally, homebuyers using DPA under H.R. 600 could use their $8,000 tax credit to bolster their financial security through, for example, paying off high interest credit card debt.
"HUD's criticisms of DPA funded in part by sellers refer to a program that no longer exists and that no one seeks to reinstate. H.R. 600 would replace that program with one that makes responsible homeownership a reality for millions more qualified homebuyers."
H.R. 600 is sponsored by Reps. Al Green, Maxine Waters, and Gary Miller. A broad coalition of organizations H.R. 600, including the National Association of Homebuilders, the U.S. Conference of Mayors, the Congressional Black Caucus, the Congressional Hispanic Caucus, and the Labor Council for Latin American Advancement. Learn more about H.R. 600 at www.ameridream.org.
BACKGROUND: AmeriDream, a 501(c)(3) charity, was established in 1999 to provide housing-related programs to low and moderate income individuals and families. AmeriDream provides a wide range of programs, including homebuyer education, loss mitigation counseling, community development, and privately-funded down payment assistance. These programs are provided at no cost to the taxpayer. AmeriDream not only seeks to help families purchase homes, but also provide them with the education and other resources needed to be responsible homeowners.
SOURCE AmeriDream
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