Industry NewsMortgage

Clock ticking again on seller-funded down payments

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Federal regulators on Monday renewed their efforts to ban seller-funded down-payment assistance on FHA-guaranteed loans, publishing a proposed rule and reopening the public comment period on the plan until Aug. 15. The Department of Housing and Urban Development says allowing sellers or others with a financial stake in the sale of a home to fund down payments inflates home prices and triples the chance that a home will end up in foreclosure. A federal district court judge in March blocked HUD from implementing a final rule banning the practice that was published in the Oct. 1 Federal Register, saying HUD had not fully explained why it was reversing course from past policies. Nehemiah Corp. of America and two other nonprofits that operate seller-funded down-payment-assistance programs sued HUD to block implementation of the rule (see story). In Monday's Federal Register, HUD restated its previously proposed rule, but provided additional details on the rationale behind ...