Call it another casualty of the Wall Street bailout. A hotly debated down payment assistance program that started in Sacramento and helped fuel thousands of home sales nationwide came to an end Tuesday.

Last-ditch efforts this week in Washington by Sacramento housing giant Nehemiah Corp. of America and others failed to save the program, which needed congressional approval.

"Events of the past week have so overshadowed every other issue in this country that debate on the restoration of down payment assistance got lost," said Scott Syphax, president and chief executive officer of Sacramento's Nehemiah Corp.

He called for a national, town hall-style meeting by phone today among thousands of real estate professionals and community activists to discuss options for reviving the program.

In a region where some say up to 40 percent of first-time buyers are using the down payment assistance program, its demise raised alarms that it will trigger a noticeable slowdown in the capital region's real estate market.

"I think we're going to see a dramatic difference in sales next month," said Jeff Johnson, Citrus Heights branch manager of Platinum Home Mortgage.

Others said it might not be huge, but "it will be meaningful and noticeable in the Sacramento market," said Andrew LePage, analyst for La Jolla-based property researcher MDA DataQuick.

In recent weeks, mortgage brokers said many buyers rushed to close escrow on homes before the ban took effect.

One who missed out is Samara Brown of Sacramento, who with her husband, James, was on the verge of buying a $105,000 home in foreclosure.

Brown, a 30-year-old administrator for Apple Computer in Elk Grove, said they had a loan approval, but needed more time to get down payment assistance.

"It was a cute little house on 53rd Avenue," said Brown, a mother of two. "We were looking at other loans. But this down payment assistance would have been perfect for our situation."

The down payment assistance program was killed in a provision of the nation's omnibus housing bill passed by Congress in July and signed by President Bush. A new bill by Rep. Maxine Waters, D-Los Angeles, would have reinstated the program.

The latest developments followed years of assertions by federal housing authorities that lower- and moderate-income users of down payment assistance defaulted on their home loans at an excessive rate. Officials with the Federal Housing Administration also claimed that those defaults were endangering the soundness of FHA's loan portfolio.

Supporters of the practice, including U.S. mayors and some of the most powerful voices in the nation's real estate industry, tried to overturn the ban and won a favorable vote Sept. 16 on Waters' bill in the House Financial Services Committee. But the effort was overrun by the historic battle over a $700 billion Wall Street financial rescue plan.

Bay Area economist Robert Fountain, who has done research for Nehemiah, said down payment assistance helped close escrow on 500,000 homes worth $116 billion in the United States last year.

Down payment assistance began as a novel idea in the mid-1990s at South Sacramento's Antioch Progressive Baptist Church. Created for people who could afford monthly payments, but not a sizable down payment, it became a tool for hundreds of thousands of lower-income buyers nationally to buy their first homes. The church's concept eventually became Nehemiah Corp., which dominated a down payment industry populated by dozens of imitators.

Under the system, a borrower who can't afford the down payment requests a "gift" from Nehemiah or another provider, which gives the prospective buyer a check for the set amount. The seller pays Nehemiah that amount, plus a $499 processing fee.

Despite Nehemiah's interest in reviving the program, the Sacramento firm has already began retooling itself as an urban developer. Nehemiah last year won approval from Sacramento city officials for a 65-acre development called Township 9 just north of downtown. The project will encompass 3,000 residences along with offices, restaurants and retail space. Groundbreaking is set for next year.

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.