Please see the notice from Ed Golding, Principal Deputy Assistant Secretary for Housing and Head of the FHA, regarding HUD’s position on down payment assistance programs, like those run by State Housing Finance Agencies.
“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.
Here is a link to the audit: https://www.hudoig.gov/sites/default/files/documents/2015-LA-1005.pdf”