Homebuyers, industry professionals, and political officials had argued homebuyers receiving down payment assistance are performing equal to or better than FHA borrowers in general. Industry insiders are lauding HUD's decision to withdraw the rule.

The proposed rule was published in the Federal Register on Sept. 14, 1999. It would have permitted some gifts by non-profit corporations for use as the mortgagor's investment, but would have prohibited them whenever they came from the seller of the property, or if the seller provided other consideration to the nonprofit for the gift.

During the two-month comment period, only 21 of the 1,871 people who testified about the program, supported the ruling, according to industry reports. The overwhelming majority opposed it. Hud's withdrawal from the Federal Register/Vol. 66, No. 9/Friday, Jan. 12, 2001/Proposed Rules states, "Based on these public comments, HUD has determined to withdraw this proposed rule on sources of homeowner down payment."