Has the IRS issued any guidance on the criteria for exemption, under section 501(c)(3), of organizations that sponsor down payment assistance programs? Revenue Ruling 2006-27 provides guidance to organizations applying for tax exemption and those exempt under Internal Revenue Code section 501(c)(3) that provide down payment assistance to homebuyers. The ruling affirms that down payment assistance programs that are not seller-funded can further exempt purposes by assisting low-income home buyers or by combating community deterioration. The ruling makes it clear that organizations providing seller-funded down payment assistance will not qualify for exemption. The ruling also describes the tax treatment of down payment assistance to buyers for purposes of the exclusion from gross income as a gift under Code section 102 or inclusion in the home’s basis under section 1012.