What If 5% Down to Purchase a Home Became Mandatory?

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I thought I’d reblog Kathy’s post on FHA financing.  Hopefully it will remain at the current 3.5% down payment minimum requirement.

Via Kathy Stankard (RE/MAX Executive Realty):

What if 5% down became mandatory to purchase a Franklin, MA home?  The FHA presently only requires 3.5% to be able to buy but there is discussion of raising the required deposit to 5%.

There was a time when a metro west of Boston/Franklin MA area Realtor would rarely see buyers who were only putting down 3.5% through an FHA loan.   As the economy has changed and buyers have less saved, the FHA program has become the norm over the past few years–especially for first time buyers.

The National Association of REALTORS® also opposes the proposal to raise the mandatory down payment for an FHA loan. “The FHA remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices,” said Charles McMillan, NAR immediate past president, in testimony before the House Subcommittee on Housing and Community Opportunity.

“As the leading advocate for housing issues, NAR believes that one of the best ways Congress can help strengthen FHA is to quickly consider and pass legislation that would make current loan limits permanent,” McMillan said.

McMillan went on to say that FHA was able to fill the gap for those who could not otherwise obtain a traditional loan. He cited statistics that FHA insured almost 30 percent of single-family mortgages in 2009homeowner and more than 50 percent of first-time buyer loans.

Regarding my own business, I know that two families I have helped so far this year would not have been able to purchase their homes if 5% down were mandated!

 

Kathy Stankard  RE/MAX balloon

The Kelly & Colombo Group

RE/MAX Executive Realty                                             

cell: 508-369-5131

email: franklinmahomes@comcast.net

website:  www.franklinmahomes.com

 

About susanmorrison

After living in Walpole, MA for many years, our family was transferred to the west coast when I was a senior in high school. In 1983, I graduated from Mission San Jose High School in Fremont, California. I am also a 1987 graduate of Providence College with a major in liberal arts and a minor in business administration. I bring to the table many years of sales experience beginning with thirteen years in Corporate Sales at Delta Air Lines. I'm the mother of three children and I'm very active within the Franklin, MA community. I am also a cancer survivor and support the American Cancer Society Charities.

My husband and I have built five homes and I've lived in a variety of other locations including Toronto Canada, Irving Texas and my current home in Franklin, MA. As a result of all my moving around, I came to the conclusion that I was an expert at moving...why not become an expert on the other side of the table? I earned my real estate license in 2004 and believe that I have found my true niche'. I can empathize with my clients on a variety of levels; whether they are buying or selling. And, like so many other good realtors out there, I believe that possessing good communication skills is one of the many keys to success.

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