Downpayment Hike Coming for FHA Borrowers?

The House is likely to reject an amendment that would raise the minimum downpayment on Federal Housing Administration loans to 5% from 3.5%, but legislators might accept language giving the government insurer the authority to raise the downpayment as needed. The Rules Committee meets Tuesday evening to decide which amendments can be offered to the FHA reform bill (H.R. 5072) that the House of Representatives will vote on during Wednesday's session. If approved by the Rules Committee, Rep. Melissa Bean, D-Ill., will offer an amendment giving FHA the authority to raise its downpayment, or minimum cash investment, requirement. The Bean amendment also asks FHA to submit an annual report to Congress discussing proposed or actual increases in downpayment requirements. In the past, Rep. Bean has garnered the support of conservative Democrats and Republicans for her amendments. H.R. 5072 gives the FHA more flexibility in adjusting its mortgage insurance premium structure and rebuilding its capital reserves.