May 19th, 2011 2:52 PM by Lehel S.
Tell Congress 20 percent down payments put homeownership out of reachNAR today issued a Call for Action (CFA) asking REALTORS® and their clients to contact Congress and tell them to make it clear to regulators that a proposed 20 percent down payment requirement was not their legislative intent. Instead, a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan should be implemented.
NAR believes Congress intended to create a broad QRM exemption, and evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk, not high down payments.
According to NAR research, 60 percent of recent home buyers made less than a 20 percent down payment, and it would take 14 years for a typical person to save up a 20 percent down payment to buy a median-priced home.
Proposals that require high down payments will drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market.
Click here for more information on how to contact Congress.