Loan Programs

Study Emphasizes DPAs' Positive Impact

By Amilda Dymi

SACRAMENTO, CA-The resilient story of downpayment assistance providers' fight to legalize DPA shows how market demand for affordable products keeps the lid open on an issue some in the industry prefer to ignore.

A new DPA-funded study on the controversial downpayment assistance gifts found DPA has generated $38.6 billion in revenue and 235,000 new jobs in 2008 alone.

The crisis has brought back to the spotlight the need for affordable financing and downpayment assistance for single-family housing mortgages - and these findings support the belief that DPA is an efficient product.

The economic-impact study, commissioned by Nehemiah Corp. of America here, was done by Robert Waste, a professor of public policy and administration at California State University, Sacramento, and Robert Fountain, a former professor at CSU, Sacramento with more than 25 years' experience in teaching and research on issues related to housing and regional economics.

These housing research veterans found that the DPA market accounted for $4.6 billion in total tax revenue last year.

The study also found that over 200,000 new and existing homes were sold last year with DPA from December 2007 to December 2008.

The DPA market generated about 235,000 new jobs in 2008, of which 195,000 came from new home construction and the rest from new home sales.

According to the study, loans originated thanks to DPA represent roughly 40% of all loans originated by the Federal Housing Administration.

Nehemiah alone accounted for over 40% of the overall DPA lending market helping make affordable the purchase of 78,000 houses in 2008. Of these sales, Nehemiah said, up to 25% were foreclosed homes or real estate-owned properties.