Detroit Housing Developer Calls on Rep. Kilpatrick to Advocate Changes in the National...

Detroit Housing Developer Calls on Rep. Kilpatrick to Advocate Changes in the
National Housing Bill so It Does More for Working Families

Flawed Legislation Would Increase Down Payments for FHA loans, Ban Gifts for
Low Income Buyers

DETROIT, July 23 /PRNewswire-USNewswire/ -- A Detroit housing developer is
urging Rep. Carolyn Cheeks Kilpatrick, the chair of the Congressional Black
Caucus (CBC), to revisit the housing bill under negotiation in Congress
because it prevents low income people from receiving down payment assistance
from government, non-profits or other entities at a time when many don't have
the personal savings to afford the down payment.
Frances Howze, Executive Director of Messiah Housing Corp., said the
legislation that is expected to be voted on this week in Washington creates
new hurdles for working families and individuals who need down payment
assistance. Moreover, she said the legislation will assist financial
institutions, but must do more for borrowers who can afford a mortgage payment
but do not have funds for the down payment to meet the necessary mortgage
application requirements.
"There are many good things in the bill," Ms. Howze said. "But overall it is
also supposed to stimulate the economy. That will not be the case if this
provision is not amended. Instead of increasing economic activity, it will
further depress the housing market by eliminating many people as potential
buyers. It will adversely impact many faith- based and nonprofit organizations
and the communities they serve with these types of homebuyer assistance
programs. The government went all out to rescue Bear Stearns; now government
should ensure full access to housing for low to moderate income working
families."
Ms. Howze said that Rep. Kilpatrick may be able to advocate for this
significant change because the CBC is a powerful voting bloc that the house
leadership will need to get a bill passed.
Specifically, Ms. Howze noted that provisions in the legislation could also
hinder prospective homeowners applying for loans backed by the Federal Housing
Administration (FHA). Minimum down payment requirements would increase from
3% to 3.5%, and down payment assistance by non profits and local governments
would be banned. In addition, two other important provisions address
restructuring mortgages for homeowners at risk of foreclosure and allowing
judges to reduce the principal owed for homeowners who have filed bankruptcy.
"This legislation squeezes low income buyers from both sides, making it more
difficult for them to become homeowners," Ms. Howze said. "It bans down
payment assistance at the same time that is raising the down payment amounts
for the FHA program, which finances many mortgages for working families.
That's not how to stimulate the economy; that's how you bring on a depression.

"We need legislation that helps working families keep their homes, helps
families purchase homes, and assist renters who are at risk of being evicted
and homeless due to their landlords' foreclosure," Ms. Howze said. "Those
should be the priorities. The priorities of this legislation are not focused
enough on working class homeowners."
Moreover, Ms. Howze maintains that while the legislation calls on Fannie Mae
and Freddie Mac to pay $500 million a year for the refinancing of loans for
homeowners facing foreclosure, it does not respond to the reality that by 2010
there will be well over 2 million additional families in foreclosure.
"Working families in America expect the government to assist when we have a
fragile economy, but legislation must be fair, thoughtful and good public
policy," she said. "We urge Rep. Kilpatrick to use her clout to make this
legislation better for Detroit's working families."
About Messiah Housing Corp.
Messiah Housing Corporation is an organization experienced in developing,
purchasing, rehabilitating, and constructing, and managing property since
1978. It is one of the first Community Development Corporations (CDC) and
Community Housing Development Organization (CHDO) in the nation. Messiah also
provides homebuyer counseling, financial literacy, foreclosure counseling and
renter advocacy programs.

Contact:
Michael K. Frisby,
202-625-4328

SOURCE Messiah Housing Corporation

Michael K. Frisby, +1-202-625-4328, for Messiah Housing Corp.