AmeriDream: Downpayment Assistance Programs Shouldn't Burden the U.S. Taxpayer

GAITHERSBURG, Md., June 1 /PRNewswire-USNewswire/ -- Ann Ashburn, President of
AmeriDream, Inc., today responded to the U.S. Department of Housing & Urban
Development's announcement that certain organizations may use the federal
$8,000 first-time homebuyer tax credit to offer government-subsidized
downpayment assistance (DPA) to first-time homebuyers in need of a
downpayment.

"We firmly believe in providing downpayment assistance to creditworthy
homebuyers, however HUD's policy saddles the U.S. taxpayer with an unnecessary
fiscal burden and saddles first-time homebuyers with more debt. It is
difficult to rationalize how homeowners are better off borrowing potentially
more than 100% of the purchase price of their homes rather than using DPA
funded in part by sellers to create immediate equity in their homes that does
not have to be paid back. In addition, HUD's plan proposes no underwriting
standards, no appraisal standards, and has no provisions to prevent borrowers
from taking on debt beyond their means. Lastly, this taxpayer-funded subsidy
will last only a few months, when the housing market needs a long-term DPA
solution.

"We believe there is a better alternative in Congress. H.R. 600 establishes a
privately-administered DPA program that provides safeguards for homebuyers and
that strengthens the housing market. Unlike HUD's proposal, DPA gifts under
H.R. 600 do not have to be paid back. This legislation encourages responsible
homeownership by requiring that DPA recipients be offered homebuyer education
courses, implements tougher credit requirements for DPA recipients, strict FHA
underwriting guidelines, and stiff penalties for improper home appraisals.

Finally, homebuyers using DPA under H.R. 600 could use their $8,000 tax credit
to bolster their financial security through, for example, paying off high
interest credit card debt.

"HUD's criticisms of DPA funded in part by sellers refer to a program that no
longer exists and that no one seeks to reinstate. H.R. 600 would replace that
program with one that makes responsible homeownership a reality for millions
more qualified homebuyers."

H.R. 600 is sponsored by Reps. Al Green, Maxine Waters, and Gary Miller. A
broad coalition of organizations H.R. 600, including the National Association
of Homebuilders, the U.S. Conference of Mayors, the Congressional Black
Caucus, the Congressional Hispanic Caucus, and the Labor Council for Latin
American Advancement. Learn more about H.R. 600 at www.ameridream.org.

BACKGROUND: AmeriDream, a 501(c)(3) charity, was established in 1999 to
provide housing-related programs to low and moderate income individuals and
families. AmeriDream provides a wide range of programs, including homebuyer
education, loss mitigation counseling, community development, and
privately-funded down payment assistance. These programs are provided at no
cost to the taxpayer. AmeriDream not only seeks to help families purchase
homes, but also provide them with the education and other resources needed to
be responsible homeowners.

SOURCE AmeriDream

Henry Fawell of AmeriDream, +1-410-545-5830