GOP Wants to Hike FHA Downpayments, Legislation on the WaySubmitted by bobbyw24 on Mon, 05/23/2011 - 14:50
By Brian Collins
Republican lawmakers have drafted a proposal that would raise the minimum downpayment on Federal Housing Administration loans to 5% and drastically scale back the size of the federal mortgage insurance program, according to trade group officials familiar with the effort.
A copy of the legislation, which was provided to National Mortgage News, is marked ‘Discussion Draft’ and does not list a sponsor. However, sources expect provisions of the bill to be discussed at a House Financial Services subcommittee hearing this Wednesday, May 25. Rep. Judy Biggert, R-Ill, chairs the subcommittee.
Besides raising the minimum downpayment requirement, the bill lowers the FHA loan limit in most areas of the country.
Currently, FHA will insure single-family loans anywhere in the nation on loan balances of up to $271,050. This is considered a “floor” but in high cost areas the agency will insure mortgages of up to $729,750.