Why does FHA keep changing their guidelines?

Why does FHA keep changing their guidelines?  Just when we get used to the qualifying guidelines on an FHA loan, the guidelines change and then we have to start all over again.

It was only just a couple of months ago that FHA only required a 3% down payment, now it's 3.5%.  Not that another half of a percentage is a big deal, but to some folks who have been saving a long time to get the 3% now have to save longer to get the full 3.5%.

One good thing about the FHA down payment requirement you can still get a gift from a blood relative.  They just have to show they have the money to give you and that can be accomplished with a signed "Gift Letter" and a Cashier's Check for the exact amount you need.

The other big change is the UFMIP or Up Front Mortgage Insurance Premium.  The UFMIP is the money the borrower will pay on top of the loan amount for getting an FHA loan.  This is in addition to the Monthly Mortgage Insurance or MIP. 

The UFMIP used to be 1.75% of the loan amount, now it is 2.25%.  On a $250,000 loan amount that calculates to $4,375.00 for 1.75% and now 2.25% increases it to $5,625 a difference of $1,250.00. 

Of course that amount is added to the loan amount and not expected to be paid in the closing costs, but still it will add a few extra dollars to the payment in the end.

It makes you wonder if FHA feels that the changes and increases are due to the default and foreclosure rate of existing FHA mortgages going on in the down economy and they have taken such a hit that they need to recoup their losses somehow... Isn't it funny how we all end up paying for it in the end.

I must say that FHA is still one of the best loans out there for the borrower that doesn't have the full 5% that Conventional requires and they still allow for a lower credit score of 620.  Conventional really likes a FICO score of 700 and higher, and actually they lean on the higher 700 side!!