Higher Down Payment = Fewer Buyers

If regulators get their way, many qualified home buyers may be shut out of the market very soon. 

First-time and minority borrowers are the groups that would likely suffer most under the proposed Qualified Residential Mortgage rule. The proposed rule narrowly defines QRMs, requiring a 20 percent down payment. Borrowers with less than 20 percent down will have to choose between higher fees and rates today, up to 3 percentage points more, or a 9-14 year delay while they save up the necessary down payment. 

According to the recently released 2011 National Housing Pulse Survey, 51 percent of self described “working class” homeowners and 57 percent of African American homeowners said they would not have been able to afford their current home if a 20 percent down payment was required.

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Who will be affected? Talk to current home buyers about their financing plans – how difficult would it be for them to produce a 20 percent down payment? Ask a Realtor® for insights into how this requirement could impact the market. Members of the public can express their concern to regulators at www.homeowneractioncenter.com