Mark Twain famously said the reports of his death had been greatly exaggerated.
In the case of seller-funded down-payment assistance (DPA), it is instead the rumors of the program’s rebirth that have proven premature, according to NAHB CEO Jerry Howard, who spoke with BUILDER today after a meeting at HUD. “There was reason to hope as recently as 24 hours ago,” Howard told BUILDER. “But the chances [of anything happening] have been greatly reduced.”
According to a story in today’s Wall Street Journal, there appeared to be a movement this week to revive the program, which will be eliminated as of Oct. 1 under the housing rescue legislation signed this summer. A bipartisan group of U.S. Representatives had proposed continuing the use of seller-funded down payments with FHA loans, but only for borrowers who met minimum credit scores, and for those with riskier credit profiles, higher mortgage insurance premiums.
For builders, seller-funded down-payment assistance has provided a lifeline in terrible housing markets across the country, contributing double-digit percentages of their homes sold in recent quarters. But it looks like a lifeline that builders will have to learn to do without; Senate Republicans remain strongly opposed to seller-financed DPA, according to the NAHB’s CEO.
“We would like to get it done,” Howard said. “But the hurdles we thought had been removed are still there.”
Alison Rice is senior editor, online, at BUILDER magazine.