Trump administration toughens up rules for no-money-down home mortgages

Administration is concerned about risk to $1.3T portfolio of federally insured mortgages

TRD NATIONAL /
Apr.April 22, 2019 09:30 AM
FHA Commissioner Brian Montgomery (Credit: Pixabay and Wikipedia)

FHA Commissioner Brian Montgomery (Credit: Pixabay and Wikipedia)

The Trump administration is toughening up rules on national affordable housing programs due to concerns over risk to the roughly $1.3 trillion portfolio the government has in federally insured mortgages.

The crackdown focuses on lenders for people who can’t afford the typical 3.5 percent down payment that Federal Housing Administration loans normally require, according to Bloomberg. The assistance enables four out of 10 FHA loans, and borrowers in these assistance programs become delinquent about twice as often as borrowers putting up their own money.

One of the largest down-payment programs in the country is the Chenoa Fund, and this new rule would be particularly harmful to it. The company provides roughly $100 million per month in loans to borrowers who are unable to meet the standard down-payment requirements through FHA.

The fund is run on behalf of a Utah tribal government known as the Cedar Band of the Paiutes. Cedar Band’s mortgage company views the move by the Trump administration as discriminatory against Native Americans and plans to challenge it in court. [Bloomberg] – Eddie Small


Related Articles

arrow_forward_ios
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

Zillow CEO Rich Barton (Credit: iStock)

Zillow and Opendoor aren’t making much on home-flipping

This week, the State Department of Taxation and Finance issued a new memo that notably made no mention of condos. (Credit: iStock)

Regulators quietly change stance on condos in LLC law

Realogy CEO Ryan Schneider (Credit: iStock)

Realogy’s plan to stop the iBuyers from gaining a foothold in Chicago

Daily Digest Thursday

Worker killed at Lam Group construction site, Uber signs WTC lease: Daily digest

Developers are offering to pay the increased mansion and transfer taxes to give them an edge in a difficult market. (Credit: iStock)

Amid slow sales, developers give buyers a break on mansion taxes

Triplemint’s David Walker and John Scipione with Hoboken, New Jersey (Credit: iStock)

Triplemint expands to New Jersey

Brokerage firms are strategizing ways to make up losses after the cost of application fees was capped at $20. (Credit: iStock)

Brokerages on rental application fee cap: “It hurts”

arrow_forward_ios