FHA Borrowers May Need Bigger Down Payments in Bill

Bloomberg reports:

Legislation introduced in the U.S. House of Representatives would require higher down payments from borrowers seeking federally backed loans as lawmakers try to prop up the Federal Housing Administration’s insurance fund.

Representative Scott Garrett, a New Jersey Republican, is pushing the legislation to recoup some of the program’s losses as record-high delinquencies drive FHA’s reserve fund below 2 percent of loans insured, he said in a statement. The measure brought forward today would increase the minimum down payment required for an FHA loan to 5 percent from 3.5 percent.