Looking back on 2009, a majority of the house sales we were involved in, the buyers used FHA financing. With all the changes in our industry, look for even more in 2010. Below is information regarding these important changes from a local leder, Bryan Milligan from Pacific Residential Mortgage. Buyers, please read. This affects you. Take note especially to the last paragraph, this is a huge change. Again, I cannot stress how good of a time it is to buy NOW!
A couple items of interest with FHA loans have changed or being changed in the future. (some in place now)
FHA has increased its upfront mortgage insurance premium. This premium is normally rolled into the loan and financed as part of the total loan amount. It is being raised from 1.75% to 2.25% (This is also the 2nd raise in the UFMIP in the past 4yrs.)
FHA has increased the Min down needed for borrowers with a credit score under 580 fico. This amount will be 10% down. This one here is a catch-22. As of now, there are not any lenders funding FHA loans with a credit score under 620 anyways, so..... This change doesn't affect us anyways. (Even though FHA says 580 min..Lenders with their Layer of risk and overlays, have required 620 min scores anyways. Some now require 640 and some will not fund with a FICO less than 660.)
There are talks of increasing the monthly insurance premium (currently @ .50% of the loan amount monthly) Nothing is set in stone as of yet. I will bring you current when that change is official.
FHA flipping rule: Currently FHA will not allow the sell of a home, unless the seller has been on title for 91 days prior to the accepted EMA. This change has already been approved. (it seems HUD is sitting on to many homes, and they need to find a way to get rid of them faster....no kidding)
Here is the biggest change, that affects all of us. FHA will be lowering the sellers ability to participate with closing costs. Currently the seller can contribute 6% of the purchase price, towards the borrowers closing costs and pre-paids. This number will change to 3%. This change is expected by early summer of this year. (May/June)
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