Sometimes, federal banking regulators have some really bad ideas. Like the one they’re considering now; requiring a minimum down payment of 20 percent for any kind of duplex or home loan.
That should help the housing market rebound. (Sarcasm intended.)
It is estimated that if lending standards were changed to require home and duplex buyers to have a 20 percent down payment, rather than the 3.5 percent down payment presently required for FHA insured loans, it would take most Americans an average of 14 years to save enough for a down payment.
According to estimates by the National Association of Realtors (NAR), 60 percent of all recent home and duplex buyers had down payment that was less than 20 percent.
Some members of Congress, including housings best advocate, Sen. Johnny Isakson (R) of Georgia, this tightened standard would eliminate 17 to 28 percent of all home buyers from the market.
So, if you’re thinking about buying a Minneapolis duplex or home in the near or not too distant future, a phone call or letter to your congressional representative expressing your oposition to higher down payments might be wise.
As for now, however, the minimum down payment on an owner occupied Minneapolis or St Paul duplex remains 3.5 percent.