The OUTRAGEOUS story behind H.R. 600… Why Democrats are Supporting a Bill that Allows People to Get FHA-Insured Mortgages Without Down Payments

Roughly a decade ago, several companies decided that, since borrowers with FHA-insured loans were able to get down payment assistance from family, employers, government entities or charitable organizations, they would enter the down payment assistance market by becoming nonprofit “charitable” organizations.

The difference between these organizations and the rest, however, was that they had a plan to accept so-called “donations” from the seller of a property, and then turn around and provide a “grant” to the buyer of that property, who would use the funds to satisfy the down payment requirement on a FHA insured mortgage. For handling that transaction, these charitable organizations would receive a fee… roughly $400 -$800, according to various published sources.