studies. Specifically, the GAO found that (i) the percentage of FHA insured loans that had received down-payment assistance from nonprofit organizations was increasing and that, by 2004, they accounted for approximately one in every three new loans insured by the FHA, (ii) the seller-funded programs created an "indirect stream" of funds from sellers to buyers that caused the home buyers to pay higher prices, and (iii) loans that received down-payment assistance had higher delinquency and default rates than those that did not receive it (and that seller-funded down-payment assistance programs comprised about 95% of all FHA insured loans that received any type of down-payment assistance from a nonprofit organization). Although the report did not focus on any particular program, it did identify Nehemiah as one of the three programs that accounted for most of the seller-funded down-payment assistance found in FHA insured loans. Government responses While the original OIG audit was being conducted, HUD proposed a change in its regulations that would affect seller-funded down-payment assistance programs. Proposed in September 1999, the change was intended to "prevent a seller from providing funds to an organization as a quid pro quo for that organization's downpayment assistance for purchases of one or more homes from the seller". The proposed change was never implemented. Citing a profound lack of public support for the proposal, it was formally withdrawn in January 2001. Legislative responses began in early 2004, when a subcommittee of the House Committee on Financial Services held hearings on a bill that would create a so-called Zero Downpayment Program administered by the FHA. The president of the Nehemiah Corporation gave testimony at those hearings, expressing concern about a provision in the bill that would allow FHA to assess mortgage-insurance premiums that were higher than those required from borrowers who did provide a down payment. With those higher premiums, Nehemiah's president wrote, "we might as well simply continue to offer the zero down payment option primarily through the down payment assistance industry". The bill did not become law. Similar bills were introduced in 2005, 2006 and 2007, but also did not become law. The Internal Revenue Service ("IRS") took public action in 2005. In mid year, it released two private letter rulings, each of which described an organization that was conducting operations in a manner similar to the Nehemiah Program. Each ruling found that (i) the organization's operations did not exclusively serve a