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House Financial Services Subcommittee to Hold Hearing on Zero Downpayment Legislation

WASHINGTON - The House Financial Services Subcommittee on Housing and Community Opportunity, chaired by Rep. Robert Ney (R-Ohio) will consider the "Zero Downpayment Act" at a hearing scheduled for March 24. Introduced by Rep. Patrick Tiberi (R-Ohio) in February, H.R. 3755 would eliminate the downpayment requirement for families and individuals...

By Staff Writer | Updated on March 30, 2004

WASHINGTON – The House Financial Services Subcommittee on Housing and Community Opportunity, chaired by Rep. Robert Ney (R-Ohio) will consider the “Zero Downpayment Act” at a hearing scheduled for March 24. Introduced by Rep. Patrick Tiberi (R-Ohio) in February, H.R. 3755 would eliminate the downpayment requirement for families and individuals who purchase homes with Federal Housing Authority (FHA) insured mortgages. In introducing his bill, Tiberi said the measure “will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities. Those who can afford the monthly payment, but have been unable to save for a downpayment, should not be deprived of homeownership.” According to projections by the Department of Housing and Urban Development, about 150,000 households would qualify for the new loans in the first year. Families that qualify for the zero downpayment mortgages would be charged a modestly higher insurance premium on their home loans than regular FHA borrowers. According to a release from Ney’s office, this higher premium would completely cover the costs of the program, eliminating any cost to taxpayers. H.R. 3755 complements the American Dream Downpayment Act which was signed into law by President Bush in December 2003 and gives downpayment assistance to 40,000 Americans annually. “During the enactment of the American Dream Downpayment Act last year, we learned that the biggest obstacle to homeownership for most families is the inability to come up with enough cash to meet downpayment and closing costs. Minority families in particular are burdened by high downpayment requirements,” said Ney.

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