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FHA Loan Program Changes & How They Should Affect Kansas City Home Buyers

By The Brad Papa Team

Real Estate Agent with Realty Executives of Kansas City

January 22, 2010 01:29 AM

The Federal Housing Agency (FHA) has recently announced changes to its lending policies, but home buyers just want to know "how much will this affect my ability to get a loan?" In my opinion, it won't change a whole lot!

Change #1 : FHA will continue to require a 3.5% down payment for people with credit scores above 580, but any scores below that mark would have to put down 10%. In reality, if your credit score is below 580, you probably shouldn't be buying a house at the current time. Most lenders won't even qualify you, plus giving yourself time to improve your credit will just save you money in the long run with lower interest rates.

Change #2: The amount the seller can pay in buyer closing costs will be reduced from 6% to 3%. This might affect negotiations, but in reality, 3% should cover most if not all closing costs.

Change #3: Mortgage insurance premium (MIP) will increase from 1.75% to 2.25%. While this will affect everyone, the total amount is nominal. On a $200,000 loan, it's approximately $6 extra a month.

So these changes should have a minimal effect on qualified buyers. Visit http://www.PapasInTheHouse.com for more information on Kansas City real estate and to start your Kansas City MLS home search today!