FHA Changes Coming soon.....
|
|
To build capital and reduce risk, the FHA announced that it will raise insurance rates and tighten credit score requirements. The major changes include increasing upfront premiums from 1.75% to 2.25%, reducing the maximum seller contribution from 6% to 3%, and increasing the level of FICO scores from 500 to 580 below which a down payment of 10% is required. At this point, the expected timing of the upfront premium increase will be in the spring, and the other changes will take place over the summer. |
Lets break this down point by point:
-Build capital and reduce risk. Remember when Barney Frank said
FannieMae was in great shape?
-Increase in UpFront Mortgage Ins. Premiums. This will hall have
some effect on qualifying but this premium is financed into the
loan so it should not affect a borrowers cash to close.
-Decreasing the max sellers contribution. This will make FHA more
in line with Fannie/Freddie guidelins. It will also help to stop
a property's selling price from being over inflated. In high cost
areas, this is a non-event. In areas where selling prices are
much lower it could be an issue.
-Fico score and down payment requirement. Is anyone writing FHA
loans for people with credit scores that low??
So to recap, mostly a non-event. So when it comes time for a
mortgage the question is: Would you like Vanilla, Vanilla Bean,
or Choc Chip (which is really vanilla with a few choc
chips).
0 Comments
Click here to sign up now.