FHA Says Higher Down Payments Risks Double-Dip Price Decline - Orange County Loan Officer

News from the National Association of Mortgage Processors:

 
Responding to critics, officials of the Federal Housing Administration are set to warn in Congressional testimony Thursday that a double-dip decline in housing prices may result from even a slight increase in minimum down payments on FHA-backed loans. An increase in down payments to 5%, from the current minimum 3.5%, would limit new FHA-backed loans by 40%, equivalent to 300,000 fewer home sales, according to testimony that FHA Commissioner David Stevens is set to deliver on Thursday.