Republican lawmakers have drafted a proposal that would raise the minimum downpayment on Federal Housing Administration (FHA) loans to 5% and drastically scale back the size of the federal mortgage insurance program, according to trade group officials familiar with the effort.

A copy of the legislation, which was provided to National Mortgage News, is marked ‘Discussion Draft’ and does not list a sponsor. However, sources expect provisions of the bill to be discussed at a House Financial Services subcommittee hearing this Wednesday, May 25. Rep. Judy Biggert, R-Ill, chairs the subcommittee.

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