Ending weeks of uncertainty, President Clinton has signed a $105 billion appropriations bill that includes a 27-month extension of a simplified downpayment formula for federally-insured mortgages.

Under the legislation, lenders will be allowed to determine the amount of money needed for a downpayment on FHA loans using a streamlined, two-step calculation that reduces the out- of-pocket expenses for borrowers with loans greater than $125,000.

About 200,000 first-time purchasers and lower-income families stand to benefit annually.

The program was first introduced in 1998 as a two-year pilot. The test period ended Sept. 30, and Congress and the Administration has been going round-and-round ever since, with the White House using an extension as a bargaining tool to obtain greater funding for federal housing and veterans programs.

As it is, the $30.6 billion fiscal 2001 spending bill for HUD was some $1.5 billion short of what the Administration requested. But the simplified downpayment formula will be effective for all loans closed through Dec. 31, 2002.