HUD Audit No Surprise

Now is the time for a responsible reformed down payment assistance program

GAITHERSBURG, Md., Nov. 12 /PRNewswire-USNewswire/ -- Today, HUD released its
annual report to Congress regarding the financial status of the FHA Mutual
Mortgage Insurance (MMI) Fund. As expected, MMI Fund numbers continue to
worsen, and according to the audit this was due to the "current severe housing
market decline and extremely stressful economic conditions." It further
concluded that the capital ratio of the Fund, excluding Home Equity Conversion
Mortgages, falls below the legally mandated two percent this year.

HUD's numbers, "are no surprise to us," said Ann Ashburn, President of
AmeriDream, a 501(c)(3) charitable organization providing down payment
assistance (DPA) to qualified moderate and low income individuals and
families. "The economy has hit all sectors of the housing industry hard. Why
would anyone expect that FHA, the government agency created to improve
homeownership for the riskiest populations, would escape this downturn
unscathed?"

The audit also demonstrates that DPA has been very effective in providing
homeownership to the population that FHA was created to serve. In fact, DPA
has helped over 1.8 million people become homeowners and generated over $22.1
billion in tax revenue to state and local governments. Despite its
effectiveness, the audit also repeats assertions about DPA's impact on the
claim rate. No one is seeking to revive this old DPA program that was ended
last year.

"What is needed now is a responsibly reformed DPA program, such as H.R. 600,
that includes appraisal reforms and credit score requirements that can reduce
the claims rate and still promote the goal of responsible sustainable
homeownership. These are widely recognized as simple and straightforward
measures that can address any and all concerns with DPA. In fact, the reforms
contained within H.R. 600 will ensure that only creditworthy and
homeowner-ready families become homeowners through DPA in a way that will not
negatively impact the MMIF or cost the taxpayers money. As a result of these
strong risk-mitigation measures, future DPA recipients will likely pose less
of a risk to the MMIF than other FHA borrowers," said Ashburn.

The Congressional Budget Office (CBO) scored a reformed DPA program as budget
neutral, therefore eliminating the risk to the U.S. taxpayer. During this time
of record-breaking spending, responsible DPA programs are the long-term,
common sense solution that helps bring well-qualified homebuyers into the
market in a fiscally responsible manner, while generating desperately needed
tax revenue for state and local governments.

"We continue to work with Congress and HUD to refine the proposed reforms in
H.R. 600 that will protect the MMI Fund while increasing the number of
homeowners through DPA," said Ashburn.

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