Congressional Bill Raises Required Down Payment to 5% for FHA Loans

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Housingwire.com is reporting that Congressional Bill Raises Required Down Payment to 5% for FHA Loans. Here’s the Link to the Article.

Snippet:

“A bill introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5%.

The FHA Taxpayer Protection Act of 2009 — HR 3706 — would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage.

The bill’s author, Rep. Scott Garrett (R-NJ), said the current policy of allowing closing costs to be rolled into the mortgage effectively reduces FHA down payments to as low as 2.5% because borrowers don’t have to have as much cash on hand at closing.”

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