FHA Tightens Rules, But Preserves Low Down-Payment

Newspaper headlines are screaming about how the Federal Housing Administration is tightening requirements for the loans it backs. But it seems to me the real news is that, despite much speculation these past several months to the contrary, the FHA, for most borrowers, will continue asking for a minimum down payment of only 3.5%.

Some thought the agency was set to raise it all the way up to 5 or maybe even 6 percent -- In fact, a bill making its way through Congress right now would do just that!

Keeping the 3.5 percent minimum is just what the doctor ordered if there is any real chance to fan the flames of a, thus far, weak economic recovery, which really isn't even evident as yet in the real estate market.