Senate passes FHA overhaul to help with mortgage worries

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The senate passed legislation overhauling the Federal Housing administration on Friday to combat rising foreclosures and a broader housing crisis. Legislation would increase the size of loans the FHA is allowed to insure for first time and low income homeowners. There level would be set at the size of mortgages Fannie Mae and Freddie Mac are allowed to purchase, currently at $417,000 and referred to as the conforming loan limit. Additionally, the bill would require homeowners to make a cash investment of a least 1.5% in the value of a home, that is half what the FHA currently requires. The bill would loosen underwriting standards at the Federal Housing administration so that the program can help 200,000 trouble borrowers save their homes. The final vote was 93 in favor and 1 opposed.

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