Isn't it just like FHA to propose changes that will seriously impact new buyers ability to qualify/purchase when we count on them to help the mortgage industry recover? Some of the items listed below aren't finalized yet but if they are we're quite sure we won't see the influx of buyers in Spring as we're all expecting.
- Reduction of seller contribution from 6% to 3% maximum
- Increase of UFMIP (Up Front Mortgage Insurance Premium) from 1.75% to 2.25%
- Possible increase of minimum investment requirement from 3.5% to 10% based on credit score
The above items aren't written in stone yet but our suggestion is if you have buyers that have been on the fence about purchasing try to light a fire under them now. Many 1st time buyers count on being able to ask for seller contribution towards closing and prepaid costs and with the sizable reduction of same our buyers will be required to have more cash available to close.
Remember that buyers must be under contract by April 30, 2010 and close by June 30, 2010 in order to qualify for the Federal Tax Credit that was extended! Get the word out and remind everyone you can.
As always, we're available on weekends to serve you and your customers best! Good Luck!
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