NEHEMIAH and SFDPA: Not going down without a fight

Filed under: SFDPA — admin @ 10:42 am

Ruth Lee

In the aftermath of the Housing and Economic Recovery Act of 2008 being both passed and signed into law, companies like Nehemiah and Ameridream are not going down without a fight. After ten years of seeking a regulatory or legislative remedy to the risks associated with SFDPA, FHA saw passage of its removal went with barely a whimper – drowned out by the many larger issues, such as bailouts and community reinvestment funds. Less than one week from passage, new legislation is introduced to reinstate SFDPA for consumers. I don’t anticipate that we have heard the last of the debate of SFDPA… but this is a fight for the lobbyists. With the ban going into effect October 1st, 2008, they will have a very short window to remedy the loss of SFDPA without any landmark legislation to tie it to. That will mean convincing Congress to actually accomplish something without a strong political impetus… which is like herding turtles. With the huge distraction of the coming election, it seems doubtful that any meaningful legislation will get passed, much less a “loosening” of FHA regulations.

Scott Syphax, president and CEO of The Nehemiah Corporation of America, one of the largest and oldest players in SFDPA, issued a response to passage and signature of the omnibus bill:

“As he signed the housing bill into law this morning, President Bush conceded with Congress that hard working Americans who have not been able to save a downpayment are not worthy of homeownership. We hope that Congress and President Bush wake up with a clear conscious tomorrow, knowing that millions of Americans will awake to a law that leaves them with zero alternatives for attaining homeownership. Nehemiah has fought to keep seller-funded downpayment assistance (SF-DPA) programs alive, recognizing that along with the rest of the industry, we have helped put more than one million deserving American families in homes. Recent research by Zelman & Associates reports that 10-25% of potential homebuyers will have no way of securing homeownership without SF-DPA, which will also undoubtedly have far-reaching implications for the real estate industry at large. In the wake of the Housing Bill, we at Nehemiah want to send a clear message: Nehemiah will continue to serve as a catalyst for economic empowerment and wealth creation through homeownership. We will continue to fight for the rights of potential homeowners across this country. We are willing to use every resource at our disposal to reinstate seller-funded downpayment assistance by taking the fight back to the current Administration, or taking it to the next Administration if need be.”