@article {Stegman43, author = {Michael A. Stegman}, title = {The Policy Challenges and Securitization Implications of Down-Payment Assistance}, volume = {24}, number = {4}, pages = {43--58}, year = {2019}, doi = {10.3905/jsf.2019.24.4.043}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Despite the resurgence of high loan-to-value ratio lending, saving for a down payment remains a big hurdle holding back would-be home buyers. This hurdle has led down-payment assistance (DPA) to become an important component of mortgage finance for a growing segment of low- and moderate-income first-time home buyers and a source of competitive advantage for state housing finance agencies (HFAs). The explosive growth of DPA and proliferation of lightly regulated DPA providers across the country{\textemdash}now exceeding 2,000{\textemdash}have important implications for policymakers and for MBS issuers and investors. For the former, the key issue is understanding more about whether the presence and form that DPA takes compounds the credit risk of very low down-payment lending, and for the latter, it is the extent to which prepay speeds are affected by various forms of DPA, thereby altering the economics of securitization. This article presents empirical analyses on both of these critical issues.TOPICS: Security analysis and valuation, legal and regulatory issues for structured finance}, issn = {1551-9783}, URL = {https://jsf.pm-research.com/content/24/4/43}, eprint = {https://jsf.pm-research.com/content/24/4/43.full.pdf}, journal = {The Journal of Structured Finance} }