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HUD honors all contracts with downpayment
assistance from Nehemiah

HUD is honoring ALL contracts from lenders with downpayment assistance from Nehemiah Corporation of America (Sacramento, CA). Nehemiah is recognized as exempt from federal income tax under Internal Revenue Code Section 501(c)(3) and it meets HUD requirements for a "charitable organization" (HUD Handbook 4155, Rev. 4, Section 2-10). Nehemiah will continue to operate our downpayment assistance program to serve low- to moderate-income homebuyers across the nation.

HUD officials have informed Nehemiah that HUD will continue to honor all contracts from lenders with downpayment assistance as long as the charity is in good standing with the IRS and is recognized as exempt under section 501(c)(3). To view the list of charities in good standing with the IRS visit http://apps.irs.gov/app/pub78.

In addition, FHA is accepting telephone calls on this issue at the FHA Resource Center (800) 225-5342 from 8:00 a.m. to 8:00 p.m. EST. Search the online knowledge base and find answers to the most commonly asked questions http://answers.hud.gov. Phone toll-free between 8:00 a.m. and 8:00 p.m. ET (5:00 a.m. to 5:00 p.m. PT) at: (800) CALLFHA.

As reported in the May 4, 2006 MBA News:

"FHA has indicated that they will insure loans with DAP assistance provided that the homebuyer has entered into a contract of sale (including any amendments to purchase price) on or before the date the IRS officially announces that the charitable organization's tax-exempt status is terminated. FHA will recognize the gift--if made to the homebuyer and properly documented--as an acceptable source of the downpayment. FHA seems to believe this policy avoids harm to any homebuyer who, in good faith, has a contract of sales and anticipates receiving a gift for the downpayment from such a charitable organization."

Nehemiah's IRS Nonprofit 501(c)(3) Letter

Letter from Nehemiah President and CEO