There’s a great article on The Hill today about what’s going to happen with FHA modernization following the August recess. It lays out different positions of individuals, possible deals, and roadblocks.

A sticking point is the no-money-down provision. Currently, the FHA insures loans only when the borrower makes a 3 percent down payment. Lobbyists expect a Dodd-Martinez bill to relax the requirement to 1.5 percent “cash down,” in the form of a down payment, closing costs or other expenses. But that might not be enough to appease Shelby, who has voiced skepticism about expanding the FHA, lobbyists said.

It’s nice to see some fresh information and perspectives concering the reforms. I think the 1.5% “cash down” could be an ideal compromise between those who insist on an initial investment and those who think the current 3% minimum is keeping potential homeowners as renters.

Also, it’s worth noting that 2 contenders for the Democratic nomination (Dodd and Clinton) are in on the reforms. Looks like FHA stance may have an impact on the primaries, as Dodd has already made it a big part of his campaign.

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