The U.S. Conference of Mayors


WHEREAS, home ownership is still the most effective wealth creation tool for working middle class families, and

WHEREAS, according to a 2004 study by the Milken Institute and the US Conference of Mayors concluded that working families qualifying to purchase a homes only because of receiving a private downpayment assistance grant, experience an $18,000 wealth equity gain through their successful ownership of a single family home, and

WHEREAS, homeownership stabilizes neighborhoods and makes for strong families and stronger cities, and

WHEREAS, the down payment is the primary barrier to homeownership for many qualified middle class and lower income families, and

WHEREAS, nonprofits and cities are currently allowed to assist families with downpayment to unlock the door to homeownership, and

WHEREAS, since 1997 over 500,000 families have accessed homeownership from a gift of downpayment assistance from non-profits, and

WHEREAS, 40% of the FHA's current single family mortgage production is from FHA loans combined with private downpayment assistance, and

WHEREAS, nonprofit and city downpayment assistance programs combined with FHA mortgage insurance is often a cheaper and financially better homeownership solution than other products available in the private mortgage marketplace, and

WHEREAS, downpayment assistance nonprofit providers are unregulated and like other communities there are good and bad actors and despite the lack of regulation downpayment has a much better performance record than abusive sub-prime lending products, and

WHEREAS, on May 11, 2007 - the U.S Department of Housing and Urban Development issued a Federal Register Notice FR5087-P-01, RIN 2503-AI52 banning the use of private downpayment assistance for use in obtaining an FHA insured loan, even by local governments including cities, and

NOW THEREFORE BE IT RESOLVED The US Conference of Mayors calls on Congress to continue to support private downpayment assistance provided by non-profits and cities regardless of contribution source, and Calls on Congress to hold hearings on private downpayment assistance to gain greater insight into its successes and its need for further regulation to support sustainable homeownership, and Calls on Congress to regulate the downpayment assistance industry to ensure that providers offering services that support successful homeownership are not harmed by unscrupulous providers operating in an unregulated marketplace, and Calls on HUD to withdraw Federal Register Notice FR5087-P-01, RIN 2503-AI52 restoring the ability of local governments and non-profits to provide private downpayment assistance and urges HUD to work with Congress as well as other stakeholders in promoting homeownership in preserving this vital tool in helping cities to stabilize neighborhoods and support working families in creating long term prosperity for their families.

2007 The U.S. Conference of Mayors
Tom Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Tel. 202.293.7330 ~ Fax 202.293.2352