A bill has been introduced recently that proposes the Federal Housing Administration require a 5% downpayment up from the current 3.5% buyers need to put down on an FHA home purchase. There are several other items in the bill but this is by far the biggest change.
Although it has a long way to go (through the house and senate, and then to the president) the bill has been introduced in Congress which increases the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5%. Titled "The FHA Taxpayer Protection Act of 2009" HR 3706 would also prohibit financing appraisals, initial service charges, inspections, other fees or closing costs with any part of an FHA mortgage.
It's my hope that the bill get's shot down. We need first time homebuyers if we are going to correct the housing market. By keeping the minimum downpayment for FHA at 3.5% and also extending the first time homebuyer tax credit I think we would be taking a huge step in the right direction. Of course my opinion is biased but in the big scheme of things the housing market is more important to the economic recovery than issues like executive pay and even health care for the time being.
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