Some congressmen are becoming more concerned about the Federal Housing Administration’s financial plight and they want to increase FHA’s downpayment requirement to 5%. Rep. Ed Royce, R-Calif., said FHA is operating at the same dangerous leverage ratios that led to the takeover of Fannie Mae and Freddie Mac. Rep. Scott Garrett, R-N.J., said he has drafted a bill that would increase the FHA downpayment requirement to 5% from the current 3.5% level.

“There are increasing reports of the likely necessity of a taxpayer bailout for the FHA and this legislation aims to implement reforms to try to prevent such a bailout from occurring,” Rep. Garrett said at a House Financial Services Committee hearing. The Garrett bill also calls for a General Accountability Office study to determine the appropriate leverage ratio for FHA. In the early 1990s, Congress mandated that FHA maintain a minimum 2% capital ratio.

A recent audit shows that the federal insurance fund has fallen below the 2% minimum. But FHA officials say the insurance fund should be able to maintain a positive capital position and FHA will not need taxpayer assistance. Source: National Mortgage News

What this means for Delaware Home Buyers is you would need to save up more money for a down payment. So on a $200,000 purchase right now you only need 3.5% which is $7,000 but under the new law, you would need $10,000. So this is just another reason to buy a house now before rates go up, tax credit expires and FHA requires more of a down payment.

If you need help with a Delaware Home Loan for the purchase or refinance of a home, please give me a call at 302-588-3665 or send an e-mail to DelawareMortgages@yahoo.com.

I can help you with Delaware FHA loans, Delaware USDA rural housing loans, Delaware VA loans, Delaware Conventional Loans, Delaware FHA 203k Loans, and Delaware Investor Loans.

If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713