The elimination of downpayment assistance (DPA) substantially increases the need for rental homes.  Too many Gen X and Gen Y have not saved any money for a downpayment.  They have not been taught the need to save - they want instant gratification and are “willing” to do it on credit.

The new Housing Bill:

• Bar the FHA from insuring mortgages in which the borrower’s down payment is paid by the seller, beginning on Oct. 1, 2008.
• 40% of all FHA loans use DPA
• FHA says seller-funded down DPA’s present the single biggest challenge to its solvency.  Borrowers who take part in DPA’s go to foreclosure at nearly three times the rate of borrowers who put their own money down.