The House Takes Initiative: Last month, the House overwhelmingly passed FHA reform bill HR 1852 (The Expanding American Homeownership Act of 2007). The next step is the Senate where a vote is expected within the next few months.

As the bill stands now, there are a number of significant changes that could dramatically impact home lending, including making FHA loan limits as high as $729,750 in high-cost areas, such as California and Florida. It's uncertain if the Bush administration will support the bill in its current form, but it has several features that could easily reshape FHA lending as we know it.

YOU Magazine turned to FHA expert Jeff Mifsud to highlight what this legislation could mean for borrowers in the future if this initiative is to pass in its current state:

Lower Down Payments: Authorizes zero and lower down-payment loans for borrowers who can afford mortgage payments but lack the cash for a required down payment. (In fact, options are now available which may help to expand or stabilize certain programs for those who have little to no cash.)

Subprime Borrowers: Directs FHA to provide mortgage loans to higher risk (but qualified) borrowers without authorizing unnecessary fee hikes on such borrowers.

Reverse Mortgages: Enhances the FHA reverse mort ... read more >