The Federal Housing Administration is proposing to increase the up-front cash and raise minimum credit scores for borrowers who receive FHA-backed mortgages, and to limit seller assistance to buyers in terms of paying closing costs or giving free upgrades.

The idea is to increase the amount that borrowers invest in homes they buy in order to discourage them from defaulting on loans or walking away from underwater mortgages. According to a FHA spokesman, with the FHA now backing about 30 percent of all loans for home purchases and 20 percent of refinancings, tighter risk controls are needed now than when the agency had a much smaller volume of business prior to the housing downturn.

To date, however, FHA officials have not yet decided how much to increase up-front cash requirements for borrowers. As for seller concessions, the agency now allows sellers to provide 6 percent of the home’s value; the FHA wants the maximum permissible level lowered to 3 percent, in line with industry norms.