Scott Syphax, president and CEO of Nehemiah Corporation of America, is responding to the July 23 editorial "Say goodbye to seller-funded down payments."
The Bee editorialized in favor of the Housing Rescue Act, which includes the elimination of down payment assistance programs like the one pioneered by Nehemiah Corp. The Bee stated, "It is inevitable and appropriate that seller-funded down payments are headed for the congressional shredder."
The Bee's editorial board, previously a strong proponent of our program, took its position based on information from our longtime opponents. While entitled to change their minds, they do not have the right to ignore inconvenient facts.
Since 1997, Nehemiah has helped nearly 300,000 working families nationwide into homeownership through $1.2 billion in grants. Nationally, this model has helped more than 1 million families and represents 40 percent of FHA's purchase volume. These are fully amortizing, usually fixed-rate loans. Nehemiah loans are not subprime.
Our model transformed homeownership in this country, making it accessible to populations despite a lack of family wealth. More than 40 percent are first-time homebuyers of ethnic minority and more than a third are female-headed households.
The Bee chose to uncritically accept the Bush administration's assertions that down payment assistance loans lead to unacceptably high foreclosure and claim rates. Research would have shown that data used by FHA and the Government Accountability Office comes from a data warehouse that the U.S. Department of Housing and Urban Development's own inspector general cited as unreliable. In short, FHA undercounts the number of DPA loans by up to three times and divides that number into the number of claims it pays.
This type of disingenuous and manipulative data analysis resulted in two federal courts dismissing HUD regulations banning DPAs earlier this year. These same provisions are now poised to become law.
DPAs have been the safety-net provider of homeownership opportunity. Where will the 40,000 homebuyers a month using these programs go after Oct. 1? For lower-income families, saving a down payment is tough during good economic times. With gas at over $4 a gallon and milk near $5, saving the increased 3.5 percent down payment requirement will put homeownership even further away for American families.
Nehemiah has sought strong regulation of DPAs and beseeched HUD to work with us in partnership to make this program more effective for working-class families. HUD refused. We will continue, with diverse organizations like the U.S. Conference of Mayors, the National Association of Counties, and the U.S. Hispanic Chamber of Commerce, to fight for the underserved so they, too, can realize the American dream.
Scott Syphax, president and CEO of Nehemiah Corporation of America, is responding to the July 23 editorial "Say goodbye to seller-funded down payments."
