Congress About to Give FHA a Big Boost

Congress is poised to make FHA loans a serious alternative in the mortgage market.
By: Kenneth Harney: REALTOR® Magazine Online
The government-backed loans have been non-starters in many places for the last 10 years because the limits were too low for all but those buying the least expensive housing.

An unlikely coalition of liberals and conservatives on Capitol Hill is supporting legislation that is likely to pass the U.S. House in late June and the Senate before Congress heads home for elections in early October. It would allow the FHA to offer flexible down payments as low as zero, no prepayment penalties, and affordable rates and fees – a much better deal for first-time buyers than most subprime mortgages offer now.

If the bill passes as expected before the end of the year, it will have an immediate effect in major markets across the country, analysts think.