Comment Submitted by Pam Moore, La Plata Homes Fund, Inc.

I would like to propose the new rule also include certain non-profits, so long as the prohibition of seller paid/back side reimbursement is continued. Our agency (a 501 C 3) went through the very competitive process of becoming a CDFI (Community Development Finance Institution) - basically we are a community bank approved by the US Treasury lending money for the purposes of economic development. Economic development under the definition of a CDFI includes promoting housing stability. Our agency offers down payment assistance, however, due to this rule, our clients often can only access USDA financing. The rule precludes our 2nd mortgage from being used with FHA loans. I completely agree that a seller paid reimbursement is smoke and mirrors, and non profits manipulating the rule create higher risk; however, CDFI’s are a different story. Our 2nd mortgages assist the work force in our high-cost area to be able to stay in the area. (Teachers, law enforcement, service workers, medical staff) Please consider amending the rule to include non-profits who are CDFI’s or non-profits whose funding is not tied to seller paid contributions. Our 2nd mortgages funded through CDFI or CDBG (awarded through the non-profit) are legitimate sources for communities to further their community housing plans; just becuase the money does not flow thorugh a government entitiy should not preclude its use. These 2nd mortgages actually strengthen the FHA's position and lessen risk.