New at Reason: Steve Chapman on the FHA's Easy Money Policies

October 15, 2009

Given the collapse in real estate prices, the weak economy, and the epidemic of foreclosures, banks are acting with more caution than before. They now commonly require home buyers to make down payments of 20 percent to qualify for a loan. But as Steve Chapman writes, the Federal Housing Authority often requires only 3.5 percent, which has had two predictable effects: the agency is issuing more loans, and the default rate on those loans is soaring.

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