WASHINGTON - The head of the Federal Housing Administration is warning that boosting the minimum down payment borrowers must provide to qualify for home loans backed by the agency could threaten the housing market.
FHA commissioner David Stevens said at a House hearing Thursday that his agency would insure 300,000 fewer loans per year if the mandatory down payment was hiked from the current level of 3.5 percent to 5 percent. That’s a 40 percent drop.
The result would a potential “double-dip in housing prices,” because fewer people would qualify for loans, Stevens told lawmakers.
The FHA does not make loans, but offers insurance against their default. It has been insuring …
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