“The U.S. Federal Housing Administration said on Tuesday it will raise the minimum down payment required to secure an FHA-backed mortgage for less creditworthy borrowers as part of a series of steps to shore up the agency’s finances.

The FHA said borrowers with credit rating scores below 580 would be required to make a down payment of at least 10 percent, while the rate for higher-ranked borrowers would stay at 3.5 percent.

It also said it would increase the up-front mortgage insurance premium, which is paid by the borrower when the loan is made, to 2.25 percent from 1.75 percent.

The moves will raise the cost of mortgages at a time the housing sector is trying to find its feet, but the agency said it was a prudent step to ensure its financial health and carry on its mission of supporting home ownership…”

Read the full article: http://www.reuters.com/article/idUSN1910413620100120

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