News-Flash: FHA Will not Increase Downpayment

Recently we have reported on the new FHA changes that raised the mortgage insurance rate to go from 1.75% to 2.25% in order to offset declining reserves caused by high default rates. We also noted that later this year the required minimum downpayment for an FHA backed loan would go up from 3.5% to 5%.

The later was proposed by Rep. Scott Garrett  (R-New Jersey) as an amendment before the House Financial Services Committee. The amendment was, however, not approved.