Homebuyers looking for a Federal Housing Administration loan would have to put down a larger down payment if a bill introduced Thursday becomes law.

Lawmakers are considering a proposal that would lift the Federal Housing Administration’s required loan down-payment minimum from 3.5% to 5%. 

The bill, proposed by Congressman Scott Garrett (R-N.J.), would also eliminate FHA financing of closing costs.

At a Thursday House Financial Services Committee hearing, Garrett equated his effort to stricter capital requirements proposed for Wall Street firms, and said borrowers should have a higher stake in their home purchases.

“Maybe we should sort of treat them with some of the same requirements” being suggested for financial companies, akin to capital requirements and leverage ratios that Wall Street firms and others are being asked to have, Garrett said.

Garrett questioned Federal Reserve Chairman Ben Bernanke on his bill’s effects in the hearing Thursday.  Bernanke declined to comment, but spoke generally on raising the down payment. “You can make the restrictions tougher and tougher, that reduces the risk to the taxpayer -- absolutely,” said Bernanke.  “And it reduces the number of people who can get mortgages.”

Bernanke pointed out it is ultimately up to Congress to decide how much taxpayer exposure it will provide to help more Americans buy homes.

“I think it’s undeniable that the FHA loans -- because of the low down payments and so on -- are riskier than other mortgages being made, and therefore have a greater risk of loss which would be made up by the taxpayer,”  said Bernanke.  “That tradeoff is your tradeoff in terms of what risk you think the government is willing to take in order to support the housing market and homeownership.”

The bill would also commission the Government Accountability Office to study the FHA and determine its appropriate capital levels.

Last month, FHA Commissioner David Stevens said the FHA’s capital ratio had fallen below its required 2% level.  

Homebuilder stocks were generally down more than the broad market on Thursday, with companies such as Lennar (LEN), D.R. Horton (DHI) and KB Home (KBH) down multiple percentage points as of midafternoon.