The House and Senate have both passed changes to the FHA Loan procedures and the White House has indicated that it will also sign, possibly today. What does this mean for you? That all depends on how much of the FHA loan you were planning to utilize. Some of the direct impacts are the Ban on Down-Payment assistance programs, the increase of required down-payments, and a sizable tax-break for first time home buyers.

The Ban on Down-Payment Assistance (DPA) is a good move for all of us. These programs used approved Charitable organizations that would assist homeowners with their required 3% down payments. In theory this is a great idea, in practice, not so much. Most charitable organization would have a seller “donate” the percentage to their program (to include a tax break for their donation), which would then “donate” the gift to the buyer as their DPA. The problem comes with the increased amount of the house to cover the donation/gift. If these buyers can’t afford a measly 3% down payment, what makes us think that they can maintain a steady house payment? HUD statistics show us that 30% of FHA loans used DPA , with 10% of those going into foreclosure, as opposed to the 6% of all other HUD loans. Mark one up to Congress for a cutting out the loophole.

Along with the DPA measures being gone, our law makers have increased the required down-payment from 3% to 3.5% Other than making sure that new home owners really want their house by requiring them to save an extra $500 for every $100,000 borrowed, there’s not many requirements that stand out in the ‘sweeping changes’ that Congress has enacted that will affect the individual borrower.

Besides raising the capital requirements for utilizing FHA loans, Congress also gives the first time home buyers a break in the form of a $7500 tax break. Buying a home is definitely something you will want to talk to your tax-preparer about, especially this year if its your first home as it could keep some of those hard earned dollars in your pocket in the form of a tax-credit.

What if you’re not a home-buyer? Don’t worry Congress hasn’t forgot about you, they have attempted to help out local communities by making available federal grants for the upkeep and maintenance of abandoned homes. This provision is interesting for those of us that are not in financial housing trouble, but have those pesky empty housing going to waste around us, bringing us all down.

While you might not be seeking a new home, or have an abandoned home around you wasting away, these changes in the FHA are bound to affect you in one way or another. Whether it be through the bail out of Fannie Mae and Freddie Mac (with your federal taxes of course, lets say they raise the FHA debt a measly $800 billion to $10.6 trillion) or through the addition of another federal department to oversee thease widespread change. So basically, in order to come out ahead of this program, you should buy a new home using the FHA program, otherwise, you’re just an average joe taking on the tax bill for those that do.