While regulators are moving toward requiring high downpayments for the majority of home buyers, there are still ways to aid first time buyers, according to Obama administration officials.

Testifying before a Senate panel this week, Treasury secretary Timothy Geithner said the Federal Housing Administration (FHA) will be able to offer lower downpayment loans than would conventional lenders. "We have lots of ways, not just through FHA, to help them afford that first home," he said.

Federal regulators are close to unveiling a risk retention rule that requires a high downpayment — possibly 20% — for loans to be exempt from risk retention where the securitizer must retain 5% of the credit risk.

Senator Kay Hagan. D-N.C. complained that it would take many years of saving for a family to accumulate a 20% downpayment.

Housing secretary Shaun Donovan testified that FHA will remain a "bedrock" for low and some moderate-income homebuyers under the Treasury Department's plan to reform the housing finance system.

In addition, there would be a "clear commitment though a dedicated transparent stream of money that would allow, for example, downpayment assistance," he said.

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