Saving a substantial amount of money for a down payment on a house is not always plausible in today's economy with raising food and gas prices. Many people today are living paycheck to paycheck and are not able to save for the required down payment that is often up to 20 percent of the price of the house. Without a substantial down payment people often have to resort to less attractive loans with adjustable interest rates. Adjustable interest rates have led to many families losing their homes to foreclosure when they can no longer afford the payments due to raised interest rates.

There are buyer assistance programs that are approved to work with the Federal Housing Administrations loans. One such program is AmeriDream Inc that allows the seller to give up to six percent of the purchase price of the house back for closing costs or down payment. This program has allowed many people to become first time home owners. Unfortunately this nonprofit program is being threatened by the U.S. Senate and the Department of Housing and Urban Development who want to do away with nonprofit programs of this type. They feel that these programs allow families to purchase homes they cannot afford and according to Senator Kit Bond of Missouri, the surge of national foreclosures show what happens when borrowers overextend themselves. Sen. Bond feels that all homeowners should wait until they have saved for a down payment.

HUD proposed an elimination of these programs as well last fall and was blocked in court; they continue to try. HUD reported that nonprofit down payment assistance was used in nearly 15 percent of all FHA loans that default within the first 90 days. From last October to February down payment assistance was used in nearly 40 percent of all FHA loans. Ann Ashburn, president of AmeriDream questions the reliability of HUD's data. She states; "Down payment assistance funded in part by sellers has a 9 percent success rate, according to the independent U.S. General Accounting Office. To ban this program would be to virtually eliminate 100,000 HUD-qualified first-time home buyers." If this were to happen it would not only be bad for the communities but also for the economy.

According to its web site, over 280,000 families have used AmeriDream to buy a home. According to one such home owner, the assistance did not make them more likely to default on their loan but instead helped them get in the door; an accomplishment that had been a long time coming.

One mortgage broker and owner of a financial company feels that nonprofit programs are coming under scrutiny due to the FHA limit being raised making it a relevant product for more regions. The FHA exists to help people buy houses. Taking away the programs will take away the opportunity to purchase houses for a large number of families. A certified mortgage specialist states that the elimination of these programs will make the housing market worse. The things that have happened in lending over the last few years was not because of having no down payments to buy a home, it was due to having no proven ability to pay the loan. Lenders will often approve loans that are realistically out of range for many families.