FHA defends down payment minimums

Federal Housing Administration officials are contending that congressional moves to increase the minimum required for down payments on FHA-backed loans could set the residential market into another slump, according to the Wall Street Journal. Although critics claim that the FHA program allows risky buyers to make purchases beyond their means, David Stevens, commissioner of the FHA, is warning that increasing the minimum down payment requirement to 5 percent from 3.5 percent could be detrimental to the housing market. “We share the goal of increasing equity in home purchase transactions,” Stevens said, adding that he believes the proposed percentage hike would “adversely impact the housing market recovery.”