Atlanta Real Estate Blog

Last Friday, the U.S. Senate has passed the FHA Modernization Bill. The bill now goes to a conference committee where it will be reconciled with a version passed by the US House of Representatives earlier this year.

The bill is an essential component of a comprehensive real estate recovery program.  Some of the goals of this legislation are:

• Giving borrowers a safer alternative to riskier mortgage products while also helping many homeowners facing foreclosure.
• Positioning the FHA to help homeowners who face unaffordable mortgage payments as a result of resetting adjustable subprime loans and help bring stability to local markets and economies.
• Increase FHA loan limits, reduce or eliminate the statutory 3% minimum cash down payment, and give FHA increased flexibility and the ability to streamline certain programs, in addition to strengthening the loss mitigation program.
• Allow FHA to provide safe loan products and to prevent foreclosures by authorizing lenders to help borrowers who are in default.

Increasing FHA mortgage loan limits would help first-time home buyers, minority buyers, and people who do not qualify for conventional mortgages. Raising FHA loan limits would also help people living in high-cost areas get FHA loans.

FHA has made mortgage insurance widely available to individuals regardless of race, ethnic background, or social status during periods of prosperity and economic depression. This FHA program makes it possible for higher risk, but creditworthy, borrowers to obtain prime financing.

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