There are some organizations that provide down payments for those in need. The most common is legally called down-payment gift assistance (DPA) and is used with federally funded mortgage loans, where the seller makes donations to the needy buyer. The primary purveyors of this program are Nehemiah Corp. in Sacramento, California, and AmeriDream out of Gaithersburg, Maryland. In fiscal 2006, the government recorded that one-third of all FHA loans were made possible because someone gave the borrower some or all of the required 3% down payment. In many cases that someone was through the DPA.
According to the FHA the weakness with many of the DPA programs is that it is not always done out of a sense of charity. In some cases the seller makes the donation for the down payment of the buyer and at the same time raises the sales price in order to cover the gift, which means that the buyer is stuck with higher mortgage payments. All programs that provide charity assistance for down payments are now under government scrutiny.
This issue is very complex and will affect innocent buyers for years to come. Right now HUD is investigating the situation and hopefully will allow public debate on the continuation of these programs