As if there isn't enough things going up one more is coming. FHA's Insurance Fund; the fund that is used to payout when FHA loans get foreclosed is estimated to be negative $13.48 billion. This is what is estimated to carry 30 years worth of reserves.

HUD announced changes to FHA to begin sometime in 2013. A few other changes in addition to the monthly premiums and initial FHA insurance premium raising are:

  1. Raising DTI for borrowers with low credit scores. FHA will require borrowers with credit scores below 620 to have a maximum DTI (debt to income ratio) of 43%
  2. Moratorium on full cash out HECM (reverse mortgages)
  3. Raising the downpayment for loans above $625,500 to 5%
  4. Greater oversight on borrowers who are trying to obtain a new FHA loan 3 years following a foreclosure.

FHA is important in offering low downpayment options for buyers. Unfortunately due to the real estate market, job market, and the economy more FHA loans are expected to default resulting in the shortage and changes. If you are thinking about buying why not do it now while rates are still low, prices are continuing to rise, and extra costs like this have not set in yet.

 

8 Comments on FHA Mortgage Insurance Premiums set to Rise

JAN
25

Now is the time to buy. Low rates, good buys & the ability to get a mortgage will not last to much longer.   JIm
10:27am • #1
187,908 Points 1 Featured Post

Those buyers still sitting on the fence, just don't understand, prices are still low, but on the rise, especially in some markets they have gone up quite  abit, interet rates and fees are still down.  Howver, the inventory is shrinking. They  need to make that move.
10:39am • #2
227,267 Points Outside Blog Attended Rain Camp Called Shot Master

Ryan -- with things still getting stricter (and buyers already complaining about details) this is definitely the time to lock in the low rates and get off the fence.

Hope you have a fantastic weekend!
11:17am • #3
1 Featured Post Outside Blog

This is an awesome post!!!  Thinks for sharing all the information on the changes that are happening with FHA, I have learned so much from reading posts such as this one on AR.  I feel that I am not only a better Realtor but that I am also able to better serve my clients needs.  Thanks again!!!!
2:23pm • #4
1 Featured Post Outside Blog Attended Rain Camp Called Shot Master

Yep, it's going to keep costing those fence sitters more and more the longer they choose to wait.  Thanks Ryan!!
4:53pm • #5
JAN
26
Localism Sponsor Outside Blog Attended Rain Camp
Thanks for the heads up Ryan!
5:19am • #6
176,942 Points Outside Blog

FHA anounced about three years ago that they wanted a smaller market share.  This is just one of many steps they have done to acheive that goal.
6:06am • #7
175,628 Points 5 Featured Posts Outside Blog

I actually have a borrower who is looking to refinance and they're three years removed from a foreclosure they had on an investment property.  I'm in the awkward position of telling them they have to get moving on this now, for fear that their options will be restricted/eliminated in the very near future --- not to mention changes to the mortgage insurance which will erode some of their benefit.

Great post.  Everybody needs to know these changes are coming and will reduce FHA market share further.
7:59am • #8


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Ryan Bretzel

Falcon Heights, MN

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Keller Williams Integrity

Address: 2680 N. Snelling Ave. Suite 100, Roseville, MN, 55113

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