January 21, 2010. Proposed Federal Housing Authority (FHA) policy changes this year will require "more skin in the game from borrowers" according to FHA Commissioner David Stevens in a statement released yesterday on the HUD website.
Following is an outline of these changes:
- New loan to value and credit score requirements. Borrowers with a credit score below 580 will be required to put a minimum 10% down. Borrowers with a credit score of 580 or above will still be allowed the traditional 3.5% down payment.
- Upfront mortgage insurance premium (MIP) will increase to 2.25% (presently it is 1.75% of the loan amount).
- Additionally FHA will pursue conditional legislative authority to increase the annual MIP according to the financial health of FHA: "triggered either by a decline in the capital ratio below the two percent requirement, or by a certification by the Secretary that the higher cap is necessary".
- Allowable seller concessions or seller contributions to borrowers closing costs etc. will be reduced from 6% to a maximum of 3%.
Commissioner Stevens went on to say that he hopes to implement all changes by early summer after going through the appropriate channels and notification process. He also states that these policy changes will not disrupt the housing market and will contribute to it's future sustainability.
To read the complete statement go to hud.gov.
Considering the increase in capital outlay for even the best FHA borrower any prospective borrowers should act now, or at least before these changes are implemented. If you have questions about FHA insured financing or just buying a home in todays market please call me directly at 561-306-6736 or email rebuygeorge@yahoo.com
To search for available FHA homes in Southeast Florida please visit my website at
ges-realty.com
No comments:
Post a Comment