I 111th CONGRESS 1st Session H. R. 2922 IN THE HOUSE OF REPRESENTATIVES June 17, 2009 Mr. Flake introduced the following bill; which was referred to the Committee on Financial Services A BILL To establish a downpayment requirement for Rural Housing Service direct and guaranteed single-family home loan programs, to repeal the downpayment assistance initiative under subtitle E of title II of the Cranston-Gonzalez National Affordable Housing Act, and to prohibit use of amounts provided under certain other programs for downpayment assistance.

1.

Short title

This Act may be cited as the Federal Assistance Downpayment Reform Act of 2009.

2.

Downpayment requirement for Rural Housing Service single-family home loan programs

Section 501 of the Housing Act of 1949 (42 U.S.C. 1471) is amended by adding at the end the following new subsection: (k)

Downpayment requirement

The Secretary may not make a loan under section 502 to any borrower, or provide a guarantee under section 502(h) for any loan to any borrower, unless the borrower under the loan has paid, in cash or its equivalent, on account of the property to be acquired or refinanced with the proceeds of such loan an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine. .

3.

Repeal of downpayment assistance initiative

Title II of the Cranston-Gonzalez National Affordable Housing Act is amended by striking subtitle E (42 U.S.C. 12821 et seq.).

4.

Prohibition of use of certain funds for downpayment assistance

(a)

Community development block grant program

Section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305) is amended by adding at the end the following new subsection: (i)

Prohibition on use of assistance for downpayments

Notwithstanding any other provision of law (including subparagraph (D) of section 105(a)(25) of this title, as in effect pursuant to Public Law 104–204 (110 Stat. 2887)), no amount from a grant made under this title may be used to provide downpayment assistance on behalf of any family or person for the acquisition of a residence. . (b)

Neighborhood stabilization program

Subsection (d) of section 2301 of the Housing and Economic Recovery Act of 2008 (42 U.S.C. 5301 note) is amended by adding at the end the following new paragraph: (4)

Prohibition on use of assistance for downpayments

Notwithstanding any other provision of law, no amounts made available under this section may be used to provide downpayment assistance on behalf of any family or person for the acquisition of a residence. .