The FHA loan limit may be increasing from 3 1/2% down to 5% down payment

The House Financial Services Committee is meeting to discuss whether or not they are going to increase the downpayment requirement for FHA loans from 3.5% to 5%. The loan limts for FHA loans are also scheduled to decrease this year.

The FHA loan product has been what has enabled many people, first time home buyers and others, to be able to purchase homes in this tough economy. What impact do you think the decreasing the loan limit amount and increasing the downpayment requirement to purchase a home with an FHA loan will have on the California housing market and bay area, tri-valley, Livermore, Danville and California home buyers in general? Do you think it is a good idea or a bad idea? Love to hear your thoughts!