FHA says “Don’t raise down payment requirements!”

FHA Argues Against Raising Downpayment

The Department of Housing and Urban Development is urging Congress not to raise the minimum downpayment on FHA mortgage loans, saying that downpayments are not the best indicator of loan defaults.

The current requirement is at least 3.5% of the purchase price for FHA downpayment.

Testifying before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, Acting Assistant Secretary for Housing/FHA Commissioner Carol Galante warned that a legislative proposal to raise FHA’s minimum downpayment requirement to 5 percent would forestall recovery in the housing market and restrict access to credit for worthy borrowers…

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