The head of the Federal Housing Administration warned that raising down payment requirements or taking similar steps to limit the pool of eligible buyers for FHA-backed loans would hamstring a fragile housing recovery.
“If it weren’t for this program, assuming that risk is being protected, this would forestall recovery of key metropolitan markets across the nation,” said David Stevens, the FHA commissioner, during a panel session at the Mortgage Bankers Association annual convention in San Diego on Monday.
Rep. Scott Garrett (R., N.J.) introduced a measure in Congress earlier this month that would require minimum down payments of 5%, up from 3.5%, on loans backed by the FHA.
My thoughts: I support programs to help first-time buyers. However, I agree with Rep Scott Garrett that the minimum requirement should be 5%. If you can’t save 5% for a downpayment do really think you can afford a mortgage?
What are your thoughts?