A recent Department of Housing and Urban Development (HUD) Office of Inspector General audit report cited premium-priced gift and grant downpayment assistance programs for non-compliance with requirements for FHA-insured loans.
Minnesota Housing downpayment programs are not gift or grant-based, but are repayable loans secured by second liens on financed property. They are funded through a combination of Minnesota Housing resources, state appropriations, and loan repayments.
All Minnesota Housing downpayment programs comply with FHA requirements for secondary financing provided by government agencies, so this citation does not affect our programs or your process as a lender.
“In light of a recent audit by HUD’s Office of Inspector General, I want to take this opportunity to reaffirm FHA’s support of certain down payment assistance programs, like those run by State Housing Finance Agencies. These programs help creditworthy families buy their first homes in communities across the country– responsibly expanding access to credit. The intent of our rules regarding down payment assistance is clear and allows HFAs the discretion necessary to fund these programs appropriately. HUD is taking active steps to completely resolve the issues raised in the audit and to provide proper clarity and guidance to the market.”
Questions? Contact the Partner Solutions Team at 651.296.8215 or 800.710.8871 between 7:30 a.m. and 5:00 p.m. on business days.