The Department of Housing and Urban Development still does not know whether downpayment assistance programs offered by nonprofit organizations are pushing up Federal House Administration default rates, and it doesn't seem to be in a hurry to find out.Back in September 2002, the HUD inspector general issued a report that found the default rate on FHA single-family loans with DPA increased from 4.6% in October 1999 to 19.4% in February 2002. Nonprofit DPA providers complained that the HUD IG used too small a loan sample, and FHA officials pledged to conduct a larger study. That study was supposed to be completed by December 2003. But it is taking much longer than expected, and some sources believe HUD will never release it. A HUD spokesman says the DPA report won't be completed until October, at which point HUD will have to review the results. One source noted that HUD officials are not concerned about the DPA programs because they can hold FHA lenders accountable for defaults. This approach is forcing lenders to be more conservative in their underwriting, the source said.

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