list included, for example, the borrower's employer or labor union. The expanded list also included "charitable organizations". That guideline also noted that "As a rule, our concern is not with how the donor obtains the gift funds provided they are not derived in any manner from a party to the sales transaction". In 1996, HUD issued Mortgagee Letter 96–18, stating "a nonprofit or other organization that provides bona fide gifts to eligible participants should not compel the beneficiary to purchase only properties owned by the donor of the funds. Such scenarios cloud the motivations of the purchaser/borrower as well as the donor". Birth of the Nehemiah Program In March 1997, the Nehemiah Progressive Housing Development Corporation filed for approval of its Nehemiah Program with HUD's Sacramento field office. (Here, "approval" means that lenders would have written assurance, via an "approval letter", that monies received by the borrower from the Nehemiah Program satisfied HUD's guidelines for gift funds.) Nehemiah received a provisional 60-day approval, followed by a six-month approval for a demonstration program. However, similar filings in other HUD field offices were not being approved, so Nehemiah filed for a nationwide approval at HUD's headquarters in Washington. When that approval was not forthcoming, Nehemiah sued HUD in a federal court. According to a report from HUD's Office of Inspector General, the Nehemiah Program operated as follows: Prospective recipients of Nehemiah funds made application to Nehemiah and agreed to purchase a home from a seller who also participated in the program. Shortly before the closing of the sale, Nehemiah wired funds to the closing agent. This amount was described as a gift to the homebuyer. Shortly after the sale, the closing agent wired funds to Nehemiah. These funds came from the seller's proceeds and typically exceeded the amount originally wired by Nehemiah. Originally, this amount was described as a service fee but, starting in August 1999, it was called a charitable contribution (to Nehemiah). While the requested approval was pending in Washington, HUD asked its Office of General Counsel for a legal determination as to whether the Nehemiah Program satisfied its requirements for gifted funds. In April 1998, the General Counsel responded that the program did meet those requirements, finding that the funds given to the buyer were not "directly tied" to the seller. HUD then issued a letter of approval for the Nehemiah Program and the lawsuit between the two parties