Dennis Norman
Yesterday the U.S. House of Representatives passed H.R. 5072,the FHA Reform Act of 2010 which is good news for home-buyers that may need to rely upon an FHA loan for a home purchase. The bill will still need to be passed by the Senate and then signed into law by the President,but a big first step toward this was taken by the House passing it.
Highlights of the bill that I think are important to home-buyers are:
- The down-payment requirement for FHA loans will remain at 3.5 percent. There was an amendment to the bill that would have increased the down-payment requirement to 5 percent but was defeated,leaving the down-payment requirement at the present 3.5 percent level. The National Association of REALTORS estimated that,if the down-payment was increased to 5 percent,there would be 300,000 potential home-buyers removed from the market as a result.
- FHA will lower it’s up-front fee it charges borrowers for FHA mortgage insurance to 1 percent but will increase the annual premium they charge (which is added on to the payment) to 0.85 percent. This will help borrowers by lowering the up-front “out of pocket”expenses they incur,but will help FHA’s financial stability by increasing overall revenue from the premiums.
- FHA’s loan limits will be increased for multifamily elevator buildings and in extremely high-cost areas,thus opening up the option of FHA financing in more markets.
The bill had almost unanimous support in the House,with 406 representatives voting for the bill and only 4 against,so I would expect it should have strong support in the Senate as well. Oh,curious who voted against it? Here’s the list:
- Rep Paul Broun –Georgia
- Rep Jeff Flake –Arizona (really,a politician that’s a “flake”? )
- Rep Mike Honda –California
- Rep Ron Paul –Texas
Related posts:
- House Passes Bill To Extend Closing Deadline For Home-Buyer Tax Credits
- U.S. House passes Mortgage Reform and Anti-Predatory Lending Act
- Home buyer tax credit extension update;Senate Passes Bill
- Financial Reform Bill Kills HVCC;Helps Appraisers
- Home buyer tax credit extension update;House Passes Bill…On to President for approval
