FHA Reform in 2008
Tuesday, January 8th, 2008FHA Pending Reform
The House and Senate have passed competing versions of legislation aimed at modernizing the FHA and making it a major player in the mortgage market. Most notable among the bills’ provisions are increases in the lending limits for FHA, long the big barrier to relevancy in many areas with high home prices. The Senate version would raise the limit to match the Fannie Mae/Freddie Mac conforming loan limit, currently $417,000. The House bill would raise it to a whopping $729,750. Both bills would scrap FHA’s current complicated downpayment/closing cost calculation. The Senate bill would allow FHA financing with as little as 1.5% down. The House would permit 100% financing. The Bush Administration has urged Congressional action on FHA reform, so a veto is not an issue. The House and Senate are expected to work out their differences when Congress returns early this year.
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