Without doubt the FHA is a major player in the mortgage industry. And significant changes to FHA policy would mean significant changes to home buyers, and thus big changes for real estate professionals.
The basic idea that Congress is playing with right now is to raise the down payment requirement from 3% to 5%, while simultaneously prohibiting borrowers from financing closing costs. Their aim, of course, is to try to increase the amount of risk to the buyer, so that buyers will think a little bit harder about walking away from an FHA financed home.
And while increasing the amount a buyer has to pay to get into a home does increase the odds of them fighting to stay in the home, it also will mean that more potential buyers will not be able to afford a new home.
And this is certainly not what we need right now – less people buying homes. This will lengthen the recession, not help us to get out of it sooner. In my opinion, the government needs to take measures to significantly reduce the number of agencies, policies, and junk that is clogging up our system, stealing our freedom, and our money. I hope that isn’t too much of a rant for you, but feel free to leave any feed back you have below, even if you disagree.