A proposal by the Department of Housing and Urban Development to eliminate seller-financed downpayment assistance on FHA-insured loans has run into bipartisan opposition in the House.During a House Financial Services subcommittee hearing, Republicans and Democrats urged HUD to drop the proposed rule and improve its regulation and monitoring of downpayment assistance programs run by nonprofit organizations. Subcommittee Chairman Maxine Waters, D-Calif., suggested adding language to a Federal Housing Administration reform bill that would override HUD's proposed DPA rule. Rep. Waters also suggested that HUD extend the July 10 comment period deadline on the proposal for another 30 days. Rep. Gary Miller, R-Calif., urged the FHA to improve its underwriting standards on loans with DPA to improve their performance. The foreclosure rate on FHA loans with downpayment assistance provided by nonprofits is 16%.
