Mortgage Daily Logo
mortgage news from industry experts

I Do – FHA streamlined down payments become permanent

I Do

FHA streamlined down payments become permanent

November 19, 2002

By CHRISTY ROBINSON

 

A bill that makes permanent a streamlined mortgage down-payment program for low-income borrowers was passed by the U.S. House on Thursday, the Mortgage Bankers Association of America (MBA) announced.

The passage of the Federal Housing Administration (FHA) Downpayment Simplification Act of 2002 is a significant step toward improving America’s affordable housing crisis, the MBA said.

In 1998, FHA created a probationary program that simplified the process used to determine down payments for low- to moderate-income home borrowers, the Wall Street Journal said. That process was scheduled to expire at the end of 2002.

“This is truly a victory for low- to moderate-income families in America in need of affordable housing, and it’s a win for the U.S. economy,” said Kurt Pfotenhauer, MBA’s senior vice president of government affairs.

The housing bill was passed by the Senate in October and has three components, the MBA said.

It amends the National Housing Act to permanently simplify the downpayment requirements for FHA-insured mortgages for single-family homebuyers.

The bill repeals the 50% increase in the Ginnie Mae guarantee that was scheduled to take effect in 2004, because it would have resulted in either a higher interest rate on the loan or a higher closing cost payment for borrowers with the lowest incomes. The increase also would have resulted in fewer people qualifying for home loans.

Beginning in 2003, the bill also will require the U.S. Department of Housing and Urban Development (HUD) to index multifamily mortgage limits each year to the consumer price index. This will create more affordable rental housing in parts of the country where multifamily housing construction has been stalled because of high costs.

At a panel discussion at MBA’s annual convention in Chicago last month, Dr. John C. Weicher, the HUD federal housing commissioner, said FHA made 201 multifamily commitments totaling $2.98 billion in financing last year on new construction and sub-rehab projects. That represents more than 39,000 units, the highest ever on record.

“Counting all our programs, we did $7.3 billion last year in multifamily, almost 150,000 units,” he said. “That’s up from $4.7 billion in 2001.”

He said almost $500 billion in FHA residential loans are currently outstanding, and that the agency served about 17% of the overall home mortgage market last year.


Christy Robinson is the editor of MortgageDaily.com. She received a bachelor’s degree in news-editorial journalism from The University of Texas at Arlington. Her work has previously been published in The Dallas Morning News.

email Christy at: ChristyRobinson@MortgageDaily.com

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION