New FHA data refutes previous claims of Single Family Down Payment Assistance Performance


On July 30, 2008, President Bush signed into law H.R. 3221, the Housing and Economic Recovery Act of 2008. Among the many changes this bill made that are intended to assist in the recovery of the housing sector, one provision is likely to have the opposite effect. Section 2113 of the bill terminates a practice known as Seller Financed Downpayment Assistance (SF DPA) for FHA-insured mortgages effective October 1, 2008. Critics of SF DPA have claimed that this assistance greatly raises a borrower’s probability of default. This paper evaluates the prior economic evidence and provides a new analysis using recent FHA data.

DPA REPORT by Alex M. Brill Research Fellow at
 the American Enterprise Institute

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DPA Press Release RE: Brill Report
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DPA An Evaluation of Research on the
 Performance of Loans with Down Payment
 Assistance

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  CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
for H.R. 6694

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