House Republicans Propose Another FHA Down Payment Increase

In my post last week, I mentioned that while “loans like FHA and VA wouldn’t have the same restrictions, I heard talk in DC about raising the down payment.”  Yesterday, I learned just how serious that talk was. According to an article in the Washington Post on May 23rd, “A Republican-led proposal circulated Monday would boost the down payment requirement for mortgages backed by the Federal Housing Administration, a move some industry experts said would shut potential home buyers out of the market.”   This new proposal would raise the down payment requirement to 5%, an increase from 3.5%.  The FHA down payment requirement was only 3% in recent years, but was raised to its current level on January 1, 2009.  The same article also states, “FHA has raised the fees it charges borrowers by 60 percent since 2008 and dramatically improved the credit quality of its borrowers in recent years.” What does this mean for potential FHA borrowers?  Right now, fortunately, not much.  While the issue is being raised today in the House Financial Services Committee, it has not been formally introduced as legislation.  I do believe, though, that this may be a sign of things to come. -Kimberly Kahl, CAE NAEBA Executive Director Follow NAEBA: Facebook Twitter Follow me: Facebook Linked In