Legal Analysis Confirms Downpayment Assistance Ban Stretches Beyond
                             Non-Profit Groups
   Former Housing Agency Commissioner Calls on Congress to Reinstate DPA

    SACRAMENTO, Calif., Sept. 2 /PRNewswire-USNewswire/ -- According to
legal analyses conducted by two Washington D.C.-based law firms, language
within the Housing and Economic Recovery Act that ends seller-financed
downpayment assistance (DPA) for FHA loan borrowers by non-profit groups,
does not make exceptions for government agencies or local governments that
still want and are able to provide DPA. The result is that many such
government agencies or local governments also will be stopped from
providing DPA by that new language.

    Simultaneously, the Act allocates $4B for local governments to
purchase, refurbish and sell foreclosed properties, making homeownership
more attainable for working class families. However, the Act, by
eliminating seller funded downpayment assistance, will cripple local
governments' ability to sell those very same homes in combination with an
FHA mortgage should those families receive a downpayment from the agency
selling the home.

    "As towns and cities work to recover from the housing crisis, this
overlooked but critical element within the Bill greatly limits these
entities from being able to buy and sell the swath of abandoned or
foreclosed homes to needy families," said Scott Syphax, president and CEO
of Nehemiah Corp. "The Bill overlooks the fact that many of these families
will be first-time homebuyers without access to a downpayment.
Traditionally, local governments and agencies would help by providing this
downpayment assistance. However, because of overly broad language, this
will often no longer be an option for many of these transactions, should
the homebuyer want to receive an FHA insured mortgage."

    According to a letter written by Weiner Brodsky Sidman Kider PC,
affordable housing funds of government agencies, housing finance agencies
or Federal Home Loan Banks cannot be used to provide DPA to worthy FHA loan
borrowers if those agencies providing that DPA also "financially benefit"
from the sales of the homes. For example, when a local government agency
rehabilitates a foreclosed home and sells it, as part of its neighborhood
stabilization or recovery plan, it cannot also help the buyer purchase that
home with an FHA loan by providing DPA to that buyer. If it did so, when
that government agency (or its sister agency) then receives transfer or
real estate taxes following that home sale, it would "financially benefit"
from that sale. The Act does not permit a provider of DPA to do that.

    In addition, the analysis by Patton Boggs LLP states that since the
mortgagor must pay not less than 3.5% of the appraised value of the
property in cash or its equivalent on an FHA-insured loan, any donation by
a government entity toward this 3.5% downpayment requirement is prohibited
if it has obtained those funds either directly or indirectly from the
seller of the property.

    Danette O'Neal, formerly the Commissioner, Louisiana Housing and
Finance Agency serving under Governor Kathleen Blanco stated, "In an
already severely depressed state like Louisiana, limiting aid to local
families in need is preposterous." Ms. O'Neal continued, "I can only
imagine the devastating impact the October 1 ban will have on the state. As
we approach the third anniversary of Hurricane Katrina, the citizens are
still facing a shortage of decent housing, a lack of affordable housing
loan products, and insurance prices that severely affect affordability. The
downpayment assistance programs have helped hundreds of families regain
some sense of normalcy in our Hurricane ravished state as well as regain
confidence in the American dream. Reinstating these programs is a must and
Congress needs to revisit this issue for the sake of towns and cities
nationwide."

    "By limiting the pool of homebuyers to only those who are able to
provide their own down payment, the Administration is shooting itself in
the foot," Mr. Syphax said. "This is yet another example of how the
Administration has overlooked and underestimated the integral role DPA
plays in not only providing necessary help for a high percentage of
first-time homebuyers, but also its place in steadying the housing market.
Folks on all sides of the equation are going to have a much harder time
come October 1 unless DPA is reinstated - and quickly."

    On June 31, Representatives Maxine Waters, Gary Miller, Al Green and
Christopher Shays on July 31, 2008 introduced a bill that would reinstate
DPA. If passed and signed into law, the FHA Seller-Financed Downpayment
Reform and Risk-Based Pricing Authorization Act of 2008 (H.R. 6694) will
allow downpayment assistance to continue indefinitely. Visit
http://www.dpagroundswell.org for more information.

    The firms Patton Boggs LLP, and Weiner Brodsky Sidman Kider PC were
retained by Nehemiah Corporation of America, the largest provider of
seller-funded downpayment assistance. The full analysis is available upon
request.

    About Nehemiah Corporation

    The Nehemiah Corporation of America is committed to rebuilding
communities from the inside out. Along with a variety of programs and
affiliate organizations like the Nehemiah Community Foundation, the
Nehemiah Corporation leads the nation in urban revitalization and
redevelopment. Founded in 1994, the Sacramento-based nonprofit organization
operates programs nationwide, including The Nehemiah Program(R), the
country's largest downpayment assistance program that has given free
downpayment gifts to more than 300,000 families and individuals who are now
proud homeowners.



    Contact:
    Emily Parker
    212-446-1889
    eparker@sloanepr.com