Senate Nixing DPA Funding?

Senate appropriators are not providing any funds for the Federal Housing Administration to cover losses on FHA-insured mortgages with seller-funded downpayment assistance, and it could snuff out the controversial homebuyer assistance programs run by nonprofits. The Department of Housing and Urban Development has been trying to stop the downpayment assistance programs for years because of high foreclosure rates and losses. A housing bill pending in the Senate would ban seller-funded DPA on FHA loans. But House Democrats strongly support the continuation of the homebuyer assistance programs with some reforms. According to Senate Appropriations Committee staffers, the Congressional Budget Office has ruled that the appropriators must provide funding for DPA losses on a line item for contract expenses in the HUD budget. The HUD budget approved Wednesday morning by the Transportation-HUD appropriations subcommittee does not include such funding. Senate appropriators did provide an additional $39 million to meet the FHA's growing need for additional staffing and technology.