The Administration has long worried about the dip in housing construction, now at the rate of 1,100,000 starts a year v. 1,300,000 a year ago. Last week it took four steps to turn the building curve upward again:
¶ FHA reduced mortgage down payments by 2% (from 7%) on $9,000-and-under houses, cutting the maximum down payment by $180.
¶ Sellers of FHA-VA mortgages to the Federal National Mortgage Association will be required to put only 1% (instead of 2%) of the value of the mortgages in FNMA stock, thus getting more of the mortgage's actual cash proceeds.
¶ FNMA will charge 2% less...
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