A new study of privately funded down-payment assistance programs finds they have become vital for helping low- to moderate-income families become homeowners.


The study was conducted by the Milken Institute and sponsored by the Nehemiah Corporation of America, the nation’s first privately funded down-payment assistance provider.


The study examined more than 36,000 down-payment assistance families in six different cities to quantify the impact of down-payment assistance programs on individuals, cities and communities.


Some of the key findings include:


  • Over the last 12 years, home prices have risen 30 percent faster than wages and salaries for low- to moderate-income families, creating a growing “housing affordability gap.”


  • Down-payment assistance programs bridge that gap by putting hundreds of thousands of families in homes. These are families who could afford monthly mortgage payments, but were unable to save the money necessary for a down payment.


  • The Nehemiah Program has added $287 million over the last six years to municipal and county property tax receipts in the six markets studied.


  • Nationally, more than 115,000 primarily low- to moderate-income families saw their home equity rise by an aggregate total of more than $2.2 billion between 1997 and 2003, an average of more than $18,000 per family over the past six years.


  • Anecdotally, down-payment assistance program homeowners reported greater economic flexibility and stability.


The six cities studied were Atlanta, Georgia; Baltimore, Maryland; Columbus, Ohio; Philadelphia, Pa.; Sacramento, Calif., and St. Louis, Mo.


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