was settled out-of-court. In June 1998, HUD issued a memorandum to all of its field offices, informing them of their approval of the Nehemiah Program, as well as any other similar program. With the receipt of the April 1998 approval letter, the Nehemiah Program became the first private nonprofit organization to receive such written approval for a seller-funded down payment assistance program. Critiques of the Nehemiah Program In May 1999, HUD's Office of Inspector General ("OIG") initiated an audit of HUD's treatment of down-payment assistance programs operated by private nonprofit organizations, doing so in response to what it described as "citizen concerns". The audit report, issued in March 2000 (herein, the "OIG 2000 report"), concluded that HUD had been allowing the organizations to operate their programs in a way that circumvented FHA requirements. The stated rationale for this conclusion was the OIG's finding that the assistance was not a "true gift", because the nonprofit organization was being reimbursed by the seller. The OIG also presented evidence that (i) the default rate for persons receiving the assistance was "significantly higher" than the average default rate for other FHA insured loans and (ii) some sellers were raising the sales price of their properties to cover the cost of the assistance, thus requiring the homebuyers to finance higher loan amounts. Nehemiah had been given access to a draft version of the report, along with an opportunity to comment and respond. In its response, Nehemiah noted that its program did comply with FHA requirements (as determined by HUD). It also disputed the accuracy of OIG's assessment of the default risk of the program's participants, offering evidence that the "Nehemiah-assisted FHA borrowers are outperforming the FHA loan pool ... in every category of loan performance". In March 2001, HUD asked its OIG to re-examine the performance of FHA insured loans that received down-payment assistance from private nonprofit organizations. The OIG's report was published in September 2002 (herein, the "OIG 2002 report"). It found that the default rate for Nehemiah-assisted loans was about double that of other FHA insured loans. It also found that, although the number of loans that had received down-payment assistance from any private nonprofit organization (not just Nehemiah) was a relatively small percentage of the entire FHA pool (at about 4%), the percentage was increasing. For the most recent six months of the OIG's data collection, those loans represented about one in