Transportation, Housing and Urban Development, and Related Agencies Appropriations Act for 2008

Rep. Maxine Waters [D-CA]: Ms. WATERS. Mr. Chairman, I rise in strong support of the Miller-Waters-Green amendment to H.R. 3074. On June 22, 2007, the Subcommittee on Housing and Community Opportunity, which I chair, held a hearing on homeowner down payment assistance programs. That hearing provided a window into down payment assistance programs that I had not seen before.

The hearing was prompted by the issuance of the HUD proposed rule on May 11, 2007, to terminate down payment assistance programs. I applaud HUD for extending the comment period for the proposed rule, but that is not enough.

Down payment assistance provided by charitable organizations to low- and moderate-income individuals and families to purchase homes has been a mainstay of HUD and FHA since 1999. In fact, we heard testimony that 30 to 40 percent of FHA loans used some type of down payment assistance.
What was even more astonishing was that HUD proposed a similar rule in 1999, only to have never finalized it. Indeed, HUD's failure to finalize a rule gave de facto approval for the continuation of many down payment assistance programs.

Down payment assistance is often used in conjunction with HUD's mortgage insurance under the 203(b) program administered by FHA. Down payment assistance programs have helped nearly 1 million low- and moderate-income persons become homeowners, providing an instant source of equity for them. Homeownership would be out of reach to thousands of homeowners without down payment assistance programs.

Unfortunately, HUD's issuance of the proposed rule on May 11, 2007, would eliminate the use of down payment assistance programs. FHA opposes the use of direct or indirect funding provided from the sale of property, and that is fine. But an across-the-board rejection of all down payment assistance programs without further review, analysis or clarification from HUD is unacceptable.

Down payment assistance programs do not need to be the scapegoat for, as what one HUD called it, the ``looming shortfall'' in HUD's fiscal year 2008 budget. I believe if HUD is left to its own devices, this is exactly what will happen to down payment assistance programs.
I support down payment assistance programs meeting Federal requirements. Therefore, I ask that you join Gary Miller, Al Green and me in supporting the amendment to prohibit HUD from implementing the proposed rule with any funds from this bill.

###