Lifting a ban on mortgage lenders providing down payment assistance (DPA) to Federal Housing Administration (FHA) borrowers would help underserved borrowers become homeowners, according to a paper published by the Urban Institute.

Under the FHA Modernization Act of 2008, sellers, lenders and others with a financial interest in a real estate transaction are prohibited from providing DPA to FHA borrowers.

Before the 2008 housing crisis, home sellers would offer DPA to FHA borrowers and raise the sales price to cover the cost, creating exaggerated losses for the FHA program.

The housing environment is different today – where a details ⇒

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