Court Invalidates HUD Rule on Down Payment Assistance

AmeriDream Leads Successful Legal Effort To Protect Homeownership

GAITHERSBURG, Maryland (March 5, 2008) - In a momentous ruling for potential home buyers, a U.S. District Court Judge today invalidated the U.S. Department of Housing and Urban Development’s October 1, 2007 regulation prohibiting seller-funded down payment assistance, basing his ruling on “the seriousness of the final rule’s deficiencies.” As a result, HUD may not implement the regulation as proposed, which would have deprived thousands of aspiring home buyers, most of them low and middle-income, of a proven mechanism for purchasing their own home. HUD has been unable to implement this rule since October due to AmeriDream’s efforts. For a copy of the ruling, click here.

“Today’s decision goes far beyond previous Court rulings and essentially sends HUD back to square one,” said Ann Ashburn, president and CEO of AmeriDream, Inc., the down payment assistance provider that filed suit against HUD. “By determining that HUD violated federal law in adopting this regulation, the Court dealt HUD a serious blow, one that we hope prompts the agency to reconsider its position toward down payment assistance providers.”

AmeriDream was joined in its opposition to the HUD rule by members of Congress from both sides of the aisle, the Mortgage Bankers Association, the U.S. Conference of Mayors, the National Association of Counties, the National Association of Home Builders, the National Urban League, and over 14,000 individuals and families nationwide who sent comments into HUD, as well as others.

“We look forward to continuing our work with lending partners to provide Americans with an important resource to help them purchase a home,” said Ashburn.

Charitable down payment assistance funded in part with seller participation has allowed homeownership to grow without using taxpayer dollars. To date, more than one million families and individuals have utilized this down payment assistance, generating nearly $10 billion in home equity between 2000 and 2005. AmeriDream has provided more than 200,000 gifts to aspiring homeowners, 80% of whom were first-time homebuyers. AmeriDream has helped educate 60,000 homebuyers through homebuyer education courses, and helped 1,200 homeowners retain their homes when confronted with mortgage difficulties, and has committed over $30 million to affordable housing development in local communities.
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