CBO Won't Revise Zero-Down Estimate

The Congressional Budget Office is sticking by its estimate that a bill (H.R. 3755) to create a federally insured zero-downpayment mortgage program would be a costly venture, despite pressure from the Bush administration to revise it."CBO stands by its original estimate," a CBO spokeswoman told MortgageWire. In June, the CBO estimated that the cost of operating a Federal Housing Administration loan program proposed in H.R. 3755 would be $500 million over four years (2006-2009). The administration countered with an estimate by the Department of Housing and Urban Development, which suggests that a zero-down program could be run on a break-even basis. "CBO has reviewed its June 21 estimate and information provided by HUD and we still believe that the cost estimate we provided to the House Financial Services Committee in June is the most likely budgetary outcome of the proposed legislation," CBO spokeswoman Melissa Merson said. HUD officials declined to comment on the CBO's response. The House was not expected to pass H.R. 3755 this year. However, the $500 million price tag may force the administration to redesign the zero-down program next year or scrap it.