Homeownership Assistance Act of 1988

Homeownership Assistance Act of 1988 - Amends the National Housing Act to create a special mortgage insurance program for first-time homebuyers. Authorizes insurance for up to 97 percent of the home's value.

Authorizes the Federal Housing Administration (FHA) to insure a mortgage loan of up to 97 percent of appraised value for the first $50,000 (currently $25,000) of a home's value.

Repeals the current dollar cap on FHA insured mortgages in high cost areas.

Authorizes the FHA to insure adjustable rate mortgages with annual interest rate increases of up to two percent (currently one percent). Repeals the aggregate annual limit on such insured loans.

Defines "first-time homebuyer" as an individual who or whose spouse has not owned a principal residence during the 18 months prior to an FHA insured home purchase.

Authorizes an FHA demonstration program to insure mortgages for first-time homebuyer downpayments where the purchase is primarily financed or assisted by tax-exempt or other government assistance. Limits the downpayment loan to $7,500. Requires participants to receive financial counseling. Sets a maximum ten year loan maturity period.

Amends the Federal National Mortgage Association Charter Act to authorize the Government National Mortgage Association to create a secondary market for first-time homebuyer downpayment loans.

Authorizes an FHA demonstration program to insure 100 percent of a home's value for a first-time homebuyer provided that the downpayment will be paid within three years by an additional monthly payment. Requires participants to receive financial counseling.

Amends the Deficit Reduction Act of 1984 to empower the Internal Revenue Service to confiscate defaulting taxpayers' tax refunds.

Requires the Secretary to submit to program reports to the Congress within one year of enactment of this Act.