The Housing and Economic Recovery Act of 2008 was signed into law on July 30, 2008. Among other things, the act amended paragraph (9) of section 203(b) of the National Housing Act, 12 U.S.C. Section 1709(b)(9), to prohibit sellers and other third parties (other than certain family members) from providing any portion of the downpayment that a borrower is required to make to obtain an FHA-insured mortgage. The prohibition applies to all mortgages approved by an FHA underwriter on or after October 1, 2008.

A bill (H.R. 6694) has been introduced in Congress which, if enacted as currently written, would modify the law to allow seller downpayment assistance in some circumstances. The bill is currently being considered by the House of Representatives Committee on Financial Services. However, there is no guarantee that the bill will become law.