A major part of financial literacy is an understanding of the rules of money. And there is nowhere better place to learn about rules than within hall of Congress. After all, these are the lawmakers of our society and they decide upon taxes levied and the regulation of commerce. The easy thing about money management and congress, is you actually have some input into the laws affecting your money. One method of injecting your opinion is by participating in elections with votes based issue positions and political accountability and not on incumbency and political parties. Another method is to contact your legislators directly by email, phone or letter and encourage others to do the same.

Currently, Congress is considering increasing the minimum down payment for a government backed FHA mortgage to 5%. That means if a home is selling for $150,000, a mortgage applicant would need to place at least $7,500 as a down payment. A little more than a year ago the minimum down payment for FHA mortgages went from 2.25% to 3.5% as a response to the high ratio of foreclosing homes…although the majority of defaulting mortgages were with creative and exotic mortgage products held by the banks. Raising the down payment minimum will lengthen the time for home purchasers to save for a home, while possibly slowing a still depressed housing market.

Additionally, the $8,000 tax credit to first time homebuyers is about to expire in November. This $8,000 credit has breathed a significant amount of life into declining housing markets and has helped thousands achieve the American Dream of homeownership. However, Congress is discussing the option of extending the tax credit.

So as you can see, without at least a proper understanding of Congress’ actions, a person saving to purchase a home next January, could be heavily disappointed by the lack of an $8000 tax credit and the need for an additional $2,250 towards a down payment, when using the aforementioned $150,000 home price.