what is a DPA?

It's an acronym for Down Payment Assistance and refers to programs that have been eliminated by the recent so called Housing Rescue legislation. They worked by taking advantage of an FHA regulation that basically said that anyone could make the buyer's down payment on an FHA loan, except the seller. This lead to the formation of dozens of not-for-profit corporations that would grant down payments to FHA buyers. The two big names are Nehehiah and AmeriDream.

The way it typically worked is that in the purchase and sale negotiation, the buyer would ask a concession of the seller whereby the seller would pay 3% toward the buyer's closing costs and contribute an additional 3% to one of the not-for-profit down payment grant organizations. Then, at closing, the grant organization would return the 3% seller contribution as a grant to the buyer to pay the down payment. For the buyer this meant a true "0 down" loan. It always sounded a little smoke and mirrors to me but, as a Realtor ®, it helped a lot of people, including my clients, to buy homes they COULD afford, but were unable to save the down payment for or felt that waiting to save the down payment may not be in their best financial interest.

Congress, by passing the flawed HR 3221, has decided that these programs, WHICH USE NO TAXPAYER FUNDS, should be eliminated. That's too bad. From everything I can find, the foreclosure rate from these types of loans was no greater than any other FHA loan. These are not the sub-prime, 0 down, no verification loans that greedy and largely unregulated (and now failing) financial institutions used to fleece the unwitting public. They are fully documented, government backed loans.

There is legislation in Congress to enable these programs to be continued. It's HR 6694 and I urge everyone to contact their elected officials to ask for their support of this bill. You can do that by going to, https://forms.house.gov/wyr/welcome.shtml, or http://www.senate.gov/general/contact_information/senators_cfm.cfm

Both AmeriDream and Nehemiah also have links for contacting Congress.

Where's NAR on this issue? Where were they on HR 3221? Everyone talks about affordable housing. In light of the FHA down payment increase to 3.5% from 3%, along with what is already a severely depressed housing market, shouldn't our spokespeople be championing this last legitimate 0 down program?

BTW, I hate acronyms and institutional jargon. Don't you?