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Nehemiah wins court support for down payment assistance
Published 6:02 am PST Tuesday, March 4, 2008
Story appeared in BUSINESS section, Page D3
Sacramento-based Nehemiah Corp. of America won a key federal court ruling Monday that again blocked plans by the U.S. Department of Housing and Urban Development to ban its controversial down payment assistance program.
The housing agency announced in September it would ban the program within months, arguing that it triggered foreclosures and unfairly raised the price of housing for those who could least afford it.
Monday's U.S. District Court ruling followed its earlier temporary ruling that HUD had failed to supply a reasoned analysis for its decision and didn't consider reasonable alternatives.
The court's ruling represented the second time Nehemiah has prevailed over the agency's plans to stop its program. HUD attempted similar action in 1999, but backed down when home builders, mortgage companies and affordable housing groups mounted opposition.
With the program, a lender contacts Nehemiah or a similar group and asks for a down payment "gift" for a low-income buyer. Nehemiah sends a check to cover the down payment, and the seller sends Nehemiah a check for the same amount plus a $499 processing fee.
Nehemiah still faces a challenge from the Internal Revenue Service, which said the program shouldn't qualify as tax-exempt charity. Nehemiah Chief Executive Officer Scott Syphax said talks continue with the IRS.
– Jim Wasserman
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