BOSTON (TheStreet) -- Hopeful homebuyers may soon need to shell out more money upfront before being approved for a mortgage.

The public comment period concludes Monday for potential mortgage-related provisions spawned by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Among the potential outcomes is that homebuyers could be required to front a higher down payment -- as much as 20% -- before they can legally qualify for a mortgage loan.

Government regulators are cracking back into mortgage reforms that could create hurdles for buyers: a return to 20% down payments for homes.

The proposed changes are being reviewed by federal regulators, among them the Treasury Department, Federal Reserve Board, Federal Deposit Insurance Corp., the SEC, the Federal Housing Finance Agency and Department of Housing and Urban Development. There is no set timeline for when final decisions will be made.

Many in the real estate sector have joined forces to fight such a change aimed at so-called Qualified Residential Mortgage loans, arguing that a 10% or 20% down payment mandate would deliver yet another damaging blow to the floundering housing market.

In past decades, a 20% or more down payment was standard. The lower the down payment, according to conventional wisdom and ongoing research, the greater the risk of default.

As housing prices soared and mortgage lenders dove head-first into what would be the subprime crisis, that common practice fell by the wayside. You may pay more in interest, closing costs or PMI, but just 5% down is enough for many banks and lenders. FHA loans, insured by the government, typically require only a 3.5% down payment.

The Mortgage Bankers Association, in written testimony, says the proposed QRM definition "is so restricted that 80% of loans sold to Fannie Mae or Freddie Mac over the past decade would not meet these requirements."

According to the National Association of Realtors, drawing upon national savings rate data, "it would take 9.5 years for the typical American family to save enough money for a 10% down payment and closing costs, and fully 16 years to save for a 20% down payment and closing costs."

"A 10% or 20% down payment requirement for the QRM means that even the most creditworthy and diligent first-time homebuyer cannot qualify for the lowest rates and safest products in the market," an NAR statement reads, adding that such a move will "be placing homeownership out of reach for millions of potential buyers and crippling an already fragile housing recovery."

"Weak underwriting and toxic mortgages are the main cause of mortgage defaults, not well-underwritten mortgages that allow for low down payments," reads a letter circulated to government officials by opponents of the down payment hike.

There is a financial incentive for lenders to push back against tougher QRM standards.

The Dodd-Frank Act requires financial institutions that securitize mortgage loans to retain at least 5% of the credit risk. It exempts securities backed exclusively by QRMs from the risk-retention requirement, lowering the cost of securitizing these mortgages, as they are considered to hold less risk. Narrowing the scope of what qualifies will mean homebuyers need to meet tougher standards.

If fully implemented, other Dodd-Frank related provisions could mean limiting the mortgage payment to 28% of gross income and limiting all debt to 36% as part of the mortgage qualification process.

No credit score requirement is currently mandated, but a mortgage loan would qualify as a QRM only if the borrower is not 30 or more days past due on any debt obligation, or 60 or more days past due on any debt obligation within the preceding 24 months.

Borrowers who, within a span of 36 months, have been through bankruptcy, foreclosed on, engaged in a short sale or deed-in-lieu of foreclosure, or been subject to a federal or state judgment for collection of any unpaid debt would also not qualify.

The National Association of Realtors is among 44 organizations -- including the American Bankers Association, Center for Responsible Lending, National Association of Federal Credit Unions and NAACP -- making up the Coalition for Sensible Housing Policy. That group has escalated a public outreach campaign in recent days that includes broadcast and newspaper advertisements.

In statements, coalition members have stressed that they are not denying that low down payment loans are riskier than higher down payment loans. They argue, however, that high down payment requirements would put homeownership out of reach for millions.

"We are talking about people here who have managed their financial obligations carefully and they have established a good track record -- you can see that in their credit report -- but like so many people today they find it difficult to accumulate very significant savings," says Glen Corso, managing director of the

Community Mortgage Banking Project

, an organization that represents independent mortgage-banking companies. "They have accumulated a 3% or 5% down payment, or some modest amount like that, and they figure that, plus the careful management of their financial affairs, should get them the lowest cost credit in the marketplace. If this rule goes through, that won't be the case."

Corso says he can appreciate the intent, if not the specifics of how the Dodd-Frank Act sought to ensure a safe and stable mortgage market.

"Everybody knows what happened during the frenzy time," he says. "People threw common-sense out the window. The idea was to create a positive incentive for common sense mortgages ... because, at some point the credit cycle will turn, credit will become easier and people will start to push the boundaries. The idea was to say 'Don't do that.' This is a lot safer for consumers -- and much better for lenders -- so just stick with this and forget the crazy stuff."

But, he adds, "To say, 'Yes, we have a positive incentive -- but guess what? -- 80% of the people won't be able to get

loans' is just crazy."

Perspective on where first-time homebuyers may have to look for that extra down payment comes from a survey conducted last year by the National Association of Realtors: only 74% said they used their own savings, while 8% tapped into a 401(k) fund and 6% sold stocks or bonds. Making up the difference, 27% got a gift from a friend or relative and 9% relied on a loan from a relative or friend.

-- Written by Joe Mont in Boston.

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