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Mortgage Financing: Additional Action Needed to Manage Risks of FHA-Insured Loans With Down Payment Assistance
The Federal Housing Administration (FHA) permits borrowers to obtain down payment assistance from third parties; but, research has raised concerns about the performance of loans with such assistance. Due to these concerns, this report examines the trends in the use of down payment assistance with FHA-insured loans, the impact that the presence of such assistance has on purchase transactions and house prices, how such assistance influences the performance of these loans, and FHA's standards and controls for these loans. 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