Permanent Simplicity Sought
|February 11, 2002|
Legislation Would Extend Federal Housing Agency Use Of Down Payment Formula
Inman News Features
U.S. Rep. Bob Ney (R-Ohio) has introduced the Federal Housing Administration Downpayment Simplification Act, H.R. 3661. This legislation would make permanent a simplified formula currently used by the FHA to calculate single-family FHA loan down payments.
An appropriations bill last year included a provision to extend the streamlined down payment calculation to Dec. 31, 2002, but did not make the methodology permanent.
The Mortgage Bankers Association of America supports the legislation and points to the success in its estimation of the downpayment simplification pilot program as reason to make the change permanent.
MBA said failure to make the program permanent would increase the down payment cash needed for more than one-third of FHA borrowers and increase costs for lenders who would need to change automated systems to revert to the former calculation method.
"The simplified down payment program makes perfect sense for everyone involved in an FHA loan transaction, especially consumers," said MBA Chairman James M. Murphy. "MBA is committed to mortgage reforms that will help reduce consumer confusion and we encourage Congress to pass legislation this year that will simply accomplish this goal."
Copyright: Inman News Service