Down payment assistance programs pioneered by Sacramento-based Nehemiah Corp. of America helped sell more than 200,000 homes last year, according to a new study supporting a bid to reinstate the programs.
The report, commissioned by Nehemiah and written by Sacramento economists Robert Waste and Robert Fountain, said home sales enabled by down payment assistance created 235,000 jobs and paid $4.6 billion in taxes.
The programs were suspended Oct. 1 by Congress and the Bush administration. Both cited claims that people who used down payment assistance to buy homes tended to default at a higher rate.
Nehemiah, which pioneered the charitable practice in the 1990s to help lower-income people buy homes, has long argued otherwise, and stressed the boost offered by the program to the housing market and economy. Nonprofit Nehemiah was the biggest U.S. player in down payment assistance.
U.S. Rep. Al Green, D-Texas, has introduced a bill in Congress to reinstate the program.
Under the practice, a buyer who could afford monthly payments, but not a down payment, asked Nehemiah or another provider for a down payment "gift." Nehemiah would send a check for the down payment, and the seller would send back an equal amount, plus a $499 fee.
– Jim Wasserman
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