Nothing sounds unreasonable. It is not like they are giving free money to bail out individuals. They are basing premiums on borrower's risk which is the market-based thing to do. Increasing the limit that FHA can insure is necessary for many markets like California, where you can't buy anything for under $400K. Eliminating the 3% down just competes against other loan options. It is not like they are loaning 125% of the value. If the people qualify under tougher standards, it makes sense. Besides, if this can help the housing market and reduce the subprime worries, it will reduce the pressure on the fed to lower the interest rates too much which will be much more inflationary. I like the idea.
Why in the hell should responsible borrowers have to pay for the mistakes of irresponsible borrowers and bail out lenders who made stupid loans. Let the market work itself out and don’t punish those of us who are responsible. Irresponsible exuberance always causes these problems. Much like the tech stock bubble and the speculation before the Great Depression. If you bail these folks out, it only encourages them to make more stupid decisions.
If the Fed lowers rates a little now, it would be a lot better than lowering them a lot more later, which would be inflationary. Besides, the funds rate should always be in line with the market.
No one should buy a house for less than 5% down.
If people don’t have enough discipline to save up a down payment, they won’t be able to handle 30 years of payments.