There's been more than one lesson to learn from the real estate market meltdown. One is that buyers should be able to afford the home they buy. One of the measures for that has been how big a down payment they bring to the table. Home buyers who show up with say 10% of their offer price are showing their financial commitment to purchasing a home. So the question is: Is an FHA requirement of a minimum 3.5% down sufficient? The current administration has put forth a proposal, regarding shrinking Freddie Mac and Fannie Mae's role in mortgage markets, in which it calls for higher down payment minimums toward 10%.
The consumer group The Center for Responsible Lending argues that mandating larger down payments would harm the economy, housing markets and middle class families. CRL also says that raising the downpayment required would result in only marginal improvements in loan performance.
What do you think? Do keeping down payments low make sense? all4now
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