WASHINGTON — The bill that requires FHA to accept seller-provided down payments has cleared the House Financial Services Committee.
The committee voted to allow H.R. 6694 to go forward and added an amendment including civil money penalties for improper appraisals. The next step for the bill is a vote by the full House, expected to take place by the end of the month.
Although the bill was introduced with bipartisan support within the House, it faces opposition from the FHA. The agency has cited studies concluding that loans with down payment assistance go into foreclosure at three times the rate of loans made to borrowers who make their own down payments.
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The Housing and Economic Recovery Act of 2008–the massive housing bill signed into law as a response to the mortgage lending crisis–eliminates down payment assistance programs as of Oct. 1 as part of a compromise between the House and Senate versions of the legislation. The Senate version of the housing bill had banned the practice while the House version let it stand. The Bush administration also supports the ban against down payment assistance.
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