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by CareyBot

A new ruling denying home seller-funded down-payment-assistance organizations tax-exempt status is a good idea or a threat to home buyers, depending on whom you talk to. The Internal Revenue Service ruled May 4 that such organizations do not qualify as tax-exempt charities. The programs, such as those at Nehemiah Corp. and AmeriDream, provide cash assistance to home buyers who can't afford down payments and closing costs. Typically, the gifts range from 2 percent to 5 percent of the purchase price, and home buyers aren't required to repay the money. These programs have been credited with helping to boost home-ownership rates, but have come under fire after government-issued reports found that such programs have led to underwriting problems and have increased the cost of home owne...