I’ve mentioned the Downpayment Assistance Program before, and it’s one of the worst scams in real estate, and the housing rescue bill shuts it down.

The FHA requires a down payment of 3%, and “non-profit” agencies will front the money to the buyer. That money, plus what is typically a $500 fee, comes from the seller, who raises the price of his house to cover it, effectively meaning that the buyer pays an additional $500 (plus taxes and commission) to create a phony downpayment.

Huzzah!