Down payment assistance programs like The American Dream Down Payment Assistance are all but outlawed for use with any government insured loan programs.

It’s about damn time!

I can hear you now, “What’s wrong with charities helping home buyers by giving down payment assistance?”

In a word, it’s a scam…that’s why!

FHA home mortgage programs are currently under threat of extinction. The FHA home mortgage could die a needless death if reforms don’t pass Congress quickly and correctly.

Due to a number of reasons, the long-standing govenment FHA home mortgage programs are quickly becoming irrelevant. So much so, on the floor of the US Congress a few years back, their was a proposal to discontinue them altogether. Before we discuss the reasons, let’s refresh your memory on the basics of these mortgage programs.

On July 19th, Fed Chairman Bernanke testified before the Senate Banking, Housing and Urban Affairs chaired by Senator Dodd. In the Q and A portion of his testimony, Senator Carper asks Mr. Bernanke about the modernization of the FHA mortgage program. FHA mortgage programs have lost ground to more “adaptive” mortgage programs in the last few years. So much so, they have nearly fallen into obscurity. I wrote an article about a month ago if you’d like a refresher on the FHA home mortgage demise.