Working Paper 13-3: Impacts of Down Payment Underwriting Standards on Loan Performance - Evidence from the GSEs and FHA Portfolios

Author(s): ​Ken Lam, Senior Economist, Robert M. Dunsky, Principal Economist, and Austin Kelly, Associate Director for Housing Finance Research

Abstract: Policy discussions are increasingly focused on a return to more conservative mortgage underwriting standards. This study explores the relationship between down payment (loan‐to‐value ratio or LTV) requirements and loan performance of GSE and FHA mortgages, controlling for borrower characteristics and housing market conditions.