HUD Investigates Down Payment Aid Programs
The Department of Housing and Urban Development announced that it will investigate accusations that some Federal Housing Administration lenders may be discounting guidelines on down payment assistance programs.
HUD’s inspector general raised the issue earlier this year with a report that accused some FHA lenders of charging premium pricing, forcing some low- and moderate-income buyers to get stuck paying slightly higher interest rates.
HUD had initially disagreed with the inspector general’s findings. But now the agency says it will investigate further.
"HUD will separately look into any inappropriate practices, some examples include: the extent to which government-sponsored down payment assistance programs fully informed borrowers of the loan terms, or imposed inappropriate fees or costs, or enabled steering or any other coercion of borrowers," Nani Coloretti, a deputy HUD secretary, said in a note to FHA lenders, as reported by the National Mortgage News.
Nevertheless, Coloretti went on to make it known that HUD still strongly supports down payment assistance programs and that the investigation won’t change that. "They enable access to credit that allows American families to purchase homes," she wrote.
Source: “HUD to Investigate Down Payment Assistance Program Practices,” National Mortgage