FHA to Require Homebuyers to Put Up More Cash

[Moshon Reuveni]

I was wondering what’s your ideas and what can be done about this?
Dec. 2 (Bloomberg) -- Homebuyers seeking to take advantage of a government mortgage-guarantee program will have to put up more cash in some situations as officials look for ways to shore up finances at the Federal Housing Administration.
“Down payment is one of the elements we’re looking at,†Housing and Urban Development Secretary Shaun Donovan told reporters today after a congressional hearing in Washington. “A second is the upcoming mortgage insurance premium and then other cash that needs to be brought to the table.â€
The FHA is also considering cutting the amount of home seller concessions a buyer can receive by half to 3 percent of the purchase price to combat inflated appraised values, Donovan told the House Financial Services Committee. The minimum credit scores required for borrowers may also be raised, and the guarantee fees charged to lenders may increase, Donovan said.
“We have made the decision to exercise our authority to increase the up-front cash that a borrower has to bring to the table in an FHA-backed loan, to make sure that FHA borrowers have more ‘skin in the game,’†Donovan told the committee.
HUD, which oversees FHA, will provide details in January, he said. Some changes may take affect in the first quarter while others, like raising annual insurance premiums, need congressional approval and will take more time, he said.