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by CareyBot

The Federal Housing Administration's loan guarantee program remains critical to the nation's economic recovery, the National Association of Realtors said today in urging Congress to refrain from raising FHA minimum downpayment requirements. FHA insured nearly 30 percent of purchase loans in 2009, including more than half of mortgages taken out by first-time homeowners, and NAR also wants lawmakers to make temporary increases in FHA loan limits in costly housing markets permanent. But rising claims have eroded FHA's capital reserves below statutory limits, forcing the program's administrators to tighten underwriting requirements and raise upfront mortgage insurance premiums. Some critics charge that the program has become "the next subprime," and say more needs to be done...