Today, Americans for Tax Reform (ATR) urges all members of the U.S. House Financial Services Committee to support Rep. Scott Garrett’s Amendments to H.R. 5072, the FHA Reform Act of 2010 that will keep the Federal Housing Administration (FHA) solvent and will prevent another taxpayer funded bailout.
ATR supports the following amendments:
Garrett Amendment #1: The amendment would raise the FHA down payment requirement from 3.5% to 5% and prohibit closing costs from being rolled in as well.
Garrett Amendment #2: The amendment would statutorily require borrowers that have a credit score below 580 to have a 10% down payment (as FHA’s rules currently require) and borrowers that have a credit score between 580 and 620 to have a 5% down payment.
Garrett Amendment #3: The amendment would raise the FHA down payment requirement from 3.5% to 5% whenever FHA’s Capital Reserve Ratio drops below the statutorily required 2%. There is a 6-month delay after enactment of the legislation to provide more time for the housing market to improve.
Garrett Amendment #4: The amendment would prohibit the Up-Front Premium from being financed into the loan amount. This would ensure that the borrower’s LTV will be a true 96.5% as intended by Congress.
Garrett Amendment #5: This amendment would require FHA-approved private lenders retain 5% of the risk of the loans they write by allowing FHA to insure only 95% of each loan