Possibility of Increased Buyer Eligibility for FHA Loans

An agreement made December 13, 2007 in the Senate would result in hundreds of thousands of under-privileged buyers, such as those of moderate income and minorities, becoming eligible for federally insured low-rate, low-down payment mortgages. According to a December 14, 2007 article in The Washington Post, the government hopes to decrease traction on subprime loans, which place homeowners in danger of not meeting their payment requirements and has only created more stress in the current mortgage crisis. The agreement made by the senate would lower the down payment requirement to 1.5% and allow the FHA to insure mortgages up to $417,000, resulting in significant expansion on the FHA’s current mortgage insurance program and increased aid for under-privileged homebuyers or homebuyers with tarnished credit to obtain a low-interest loan.

**To read the complete article on this news break, please visit http://www.washingtonpost.com/wp-dyn/content/article/2007/12/13/AR2007121301845.html