House Bill Would Raise FHA Downpayment

Washington, DC, May 27, 2011 -- The House Financial Services Committee has drafted a bill that would raise the FHA down-payment requirement to from 3.5% to 5% and keep borrowers from financing their closing costs.

Industry advocates like the Mortgage Bankers Association said the proposal is a move in the wrong direction.

MBA Chairman Michael Berman said that down payments are not the best indicator of payment default.

National Association of Realtors President Ron Phillips said strong underwriting is a more important factor in reducing the risk of default.