Treasury Responds to Foundation's Concerns With Down Payment Assistance Guidance

The Administration is committed to making the goal of homeownership attainable by all Americans. Revenue Ruling 2006-27 furthers that goal by helping to ensure that low-income home buyers who receive down payment assistance do not pay inflated prices for their homes. By providing specific examples, the revenue ruling is also intended to ensure that down payment assistance organizations have guidance on how to conduct their operations in a manner consistent with the Federal tax laws.

The Treasury Department and the Internal Revenue Service will continue to review this important issue and, if necessary, issue further guidance to ensure that down payment assistance organizations can help to achieve the important goal of increasing home ownership while remaining in compliance with the tax law. As we consider the need for further guidance, your suggestions will be taken into consideration.

Thank you for your letter on this important matter.