By Dana Bykowski
February 9, 2004

Scott Syphax, President and CEO of the Nehemiah Corporation of America and corporate sponsor of CitiesFirstª, a public/private housing and community development initiative between the U.S. Conference of Mayors and Nehemiah Corporation of America, addressed the mayors January 23, at the closing luncheon. For years, Nehemiah has been working with the US Conference of Mayors and other industry partners in an attempt to right a major wrong. Since the founding of Nehemiah, the nation's first and largest private nonprofit provider of down payment assistance, the goal has been to remove the artificial barrier to homeownership that a down payment requirement represents. Syphax reminded mayors of the unfortunate inequality of homeownership rates in the nation's cities. Fewer than 50 percent of blacks or Latinos own a home, while the average rate of homeownership for white America is over 75 percent.

"Homeownership is not only the number one wealth creator in this country, not only one of the greatest forces behind this country's economic recovery, but it is also the quintessential goal of being an American," said Syphax. "You all know, that is not the case. Millions of people have been deprived of homeownership, not because they did not have the jobs and credit to own a home, but because they could not muster enough money for a down payment. Societal forces continue to plague our homeowner system."

For over ten years, Nehemiah Corporation of America has acted as an advocate, pushing and pleading to improve homeownership rates for all Americans. During this time Nehemiah helped almost 170,000 Americans achieve homeownership though their groundbreaking Nehemiah Down Payments Assistance Program¨. Along the way Nehemiah has given birth to an industry that serves many hundreds of thousands more. It is a not so well kept secret that currently, down payment assistance represents nearly 40 percent of all FHA home loans in this country.

"We kept telling everyone we could, if you give people the opportunity to participate in the American Dream, not only will they rise to the challenge, they will exceed your expectations, transforming their lives and their communities and permanently resetting the economic pendulum for thousands of families for many generations to come. This was and remains our mantra and our mission," state Syphax.

About 9 months ago Nehemiah commissioned a study by the Milken Institute, a California think tank, to determine just what sort of impact down payment assistance has had on individuals and communities. The completed study will be released in a few weeks, but preliminary results indicate that Nehemiah's persistence and hard work was worth it. Of the six regions where the Milken Study did their research, the study indicates that the entire portfolio of the 14, 600 Nehemiah DAP (down payment assistance) households saw their home equity rises robustly and comparable to six region's median home price increases. For instance, the DAP participants in Sacramento and St. Louis both saw their equity value jump 72 percent from 2000 to 2002, comparing to region's median home price increase of 69 percent and 16 percent, respectively.

A slightly lackluster Columbus portfolio is ranked among the lowest at an increase of 9 percent among the six regions' DAP portfolio. DAP participants in Philadelphia and Baltimore, however, saw their equity rose by 29 percent and 19 percent, respectively. The US home price appreciation is 32 percent in the period of time. St. Louis DAP grants enable the biggest push in terms of helping homeowners accumulating assets/equity. DAP program participants' equity increase is 72 percent, a rate that surpasses the region's median home price increase by 4.5 times. The outstanding performance of DAP St. Louis portfolio implies the quality of the DAP granting practice.

Additionally, on Monday, January 19, 2004 the down payment assistance industry was treated to a seismic shock. As a part of HUD's Fiscal Year 2005 budget request, HUD announced that the Department will eliminate the statutory requirement of a minimum 3 percent down payment for FHA-insured single-family mortgages for first-time home buyers. It cannot be underscored enough how important this is for lower income families. This means Washington finally seems prepared to remove this unnecessary and often debilitating hurdle for lower income families. This hurdle is the reason why Nehemiah came into existence, why the entire Down Payment Assistance Program industry exists — to overcome a bureaucratic albatross that has limited lower income families for generations.

Syphax noted however, "It is too early to determine the exact outcome of this HUD rule change. This may mean the end of the DAP industry; and if it does, we can say job well done, step aside and move on to the new challenges. But let's be clear, while this announcement is a sea change for those families looking for a hand up not a hand out, it is not the end of the struggle...rather is it a fantastic starting point for us to continue pushing forward."

According to Mayor Judith Valles, CitiesFirstª Task Force Chair, "Down payment assistance works. It is a vital economic tool, capable of transforming lives and communities."