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GOP Pushes Higher FHA Down Payments, Housing Industry Pushes Back
GOP Pushes Higher FHA Down Payments, Housing Industry Pushes Back
GOP Pushes Higher FHA Down Payments, Housing Industry Pushes Back
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May 27, 2011 (Chris Moore)

House Republicans in the Financial Services Committee have drafted a bill that would raise the minimum down payment requirements on mortgage loans insured with the Federal Housing Administration (FHA) from 3.5 percent to 5 percent and one industry giant is pushing back.

The bill would also decrease the maximum size of FHA-backed loans that had been raised in the most expensive areas of the country from $729,750 down to $625,500. The draft bill also calls for a reduction in maximum loan size in less expensive areas of the country, which currently is set at $417,000, down to $271,050.

The proposal has yet to be introduced in legislative form and like all the other housing reform bills that have originated from the House, it probably wouldn’t have a chance in the Democrat controlled Senate, but that hasn’t stopped the housing industry from expressing its displeasure.

In a recent press release, the National Association of Home Builders (NAHB) expressed its concerns that increasing the down payment requirement would create a substantial burden for all American home buyers, especially those who use FHA backed loans the most, young buyers and those with strong credit profiles but who lack the necessary finds to make a higher down payment.

“Research has shown that requiring a higher down payment does little to reduce risk of default but causes home buyers to use more of their reserves for the down payment,” said NAHB First Vice Chairman Barry Rutenberg. “Sound underwriting is the key to minimizing foreclosures and defaults, not higher down payments. This is demonstrated by current FHA foreclosure reports on loans made to borrowers with sound credit profiles, which have significantly improved.”

NAHB also feels that reducing loan limits would place further downward pressure on home prices and impair the ability of borrowers to use FHA-backed mortgage to purchase new homes. FHA high cost area loan limits are already scheduled to be reduced to $625,500 on October 1, 2011.

Instead, NAHB supports H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.) which would keep FHA loan limits at current levels.

Tags: GOP, draft bill, down payment requirement, loan limits, FHA, FHA-backed loans, NAHB, borrowers

Source:
NAHB

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Mortgage
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Estimate your monthly mortgage payment
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Calculator
Determine how much car you can afford before buying
Learn About
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15 Year vs 30 Year
Loan Comparison
Compare 15 year and 30 year mortgage loans
Todays Mortgage
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See today's mortgage rates. Shop, compare and save.

May 27, 2011 (Chris Moore)

House Republicans in the Financial Services Committee have drafted a bill that would raise the minimum down payment requirements on mortgage loans insured with the Federal Housing Administration (FHA) from 3.5 percent to 5 percent and one industry giant is pushing back.

The bill would also decrease the maximum size of FHA-backed loans that had been raised in the most expensive areas of the country from $729,750 down to $625,500. The draft bill also calls for a reduction in maximum loan size in less expensive areas of the country, which currently is set at $417,000, down to $271,050.

The proposal has yet to be introduced in legislative form and like all the other housing reform bills that have originated from the House, it probably wouldn’t have a chance in the Democrat controlled Senate, but that hasn’t stopped the housing industry from expressing its displeasure.

In a recent press release, the National Association of Home Builders (NAHB) expressed its concerns that increasing the down payment requirement would create a substantial burden for all American home buyers, especially those who use FHA backed loans the most, young buyers and those with strong credit profiles but who lack the necessary finds to make a higher down payment.

“Research has shown that requiring a higher down payment does little to reduce risk of default but causes home buyers to use more of their reserves for the down payment,” said NAHB First Vice Chairman Barry Rutenberg. “Sound underwriting is the key to minimizing foreclosures and defaults, not higher down payments. This is demonstrated by current FHA foreclosure reports on loans made to borrowers with sound credit profiles, which have significantly improved.”

NAHB also feels that reducing loan limits would place further downward pressure on home prices and impair the ability of borrowers to use FHA-backed mortgage to purchase new homes. FHA high cost area loan limits are already scheduled to be reduced to $625,500 on October 1, 2011.

Instead, NAHB supports H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.) which would keep FHA loan limits at current levels.

Tags: GOP, draft bill, down payment requirement, loan limits, FHA, FHA-backed loans, NAHB, borrowers

Source:
NAHB

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Information You Can Use
Helpful Tools

May 27, 2011 (Chris Moore)

House Republicans in the Financial Services Committee have drafted a bill that would raise the minimum down payment requirements on mortgage loans insured with the Federal Housing Administration (FHA) from 3.5 percent to 5 percent and one industry giant is pushing back.

The bill would also decrease the maximum size of FHA-backed loans that had been raised in the most expensive areas of the country from $729,750 down to $625,500. The draft bill also calls for a reduction in maximum loan size in less expensive areas of the country, which currently is set at $417,000, down to $271,050.

The proposal has yet to be introduced in legislative form and like all the other housing reform bills that have originated from the House, it probably wouldn’t have a chance in the Democrat controlled Senate, but that hasn’t stopped the housing industry from expressing its displeasure.

In a recent press release, the National Association of Home Builders (NAHB) expressed its concerns that increasing the down payment requirement would create a substantial burden for all American home buyers, especially those who use FHA backed loans the most, young buyers and those with strong credit profiles but who lack the necessary finds to make a higher down payment.

“Research has shown that requiring a higher down payment does little to reduce risk of default but causes home buyers to use more of their reserves for the down payment,” said NAHB First Vice Chairman Barry Rutenberg. “Sound underwriting is the key to minimizing foreclosures and defaults, not higher down payments. This is demonstrated by current FHA foreclosure reports on loans made to borrowers with sound credit profiles, which have significantly improved.”

NAHB also feels that reducing loan limits would place further downward pressure on home prices and impair the ability of borrowers to use FHA-backed mortgage to purchase new homes. FHA high cost area loan limits are already scheduled to be reduced to $625,500 on October 1, 2011.

Instead, NAHB supports H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.) which would keep FHA loan limits at current levels.

Tags: GOP, draft bill, down payment requirement, loan limits, FHA, FHA-backed loans, NAHB, borrowers

Source:
NAHB

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Information You Can Use

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