FHA Announces Risk Based Premiums Effective July 14, 2008

FHA has just announced that for the first time in history that, it will now take credit scores into account. These guidelines changes will become effective July 14th, 2008. I have put the link to the new guideline changes at the bottom of the page.                                                                                                                               Here are the 10 guideline changes that FHA will adopt effective July 14^th, 2008:
1. Borrowers need either no score, or at least 500, for LTV that exceeds 90%.                                                 2. Maximum LTV for borrowers with less than 500 credit score will be capped at 90%
3. Borrowers without scores will require manual underwriting.
4. Upfront Mortgage Insurance Premiums will range from 1.25% - 2.25%, based on score.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on credit score.
6. The premium is based on the borrower with the lowest score, when there are multiple borrowers.
7. If one of the borrowers has no score, then the Non-Traditional (Alternative) credit grade is used.
8. FHA will allow credit rescoring to improve a borrower's credit grade.
9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% Up front mortgage Insurance premium and.55% monthly mortgage insurance.
10. Cash-out, rate & term, and non-delinquent FHA Secure refinances are also included in this change.

Click on the link to review the new FHA guideline changes: http://rs6.net/tn.jsp?e=0016NjLL_2OXev0XZ29GXsyrKh7eY52I7YyB2GBlaPu5u_V2dFF_GUQPBTk_OiOIv5jbMjhkQiInAebuFnXMqXxMMo5zYK1n-faOWTlY0BHlkJIFHghvrY1p6quVJmGeCXdIMlGmDSpNLAffFVusduBfRkE4qHb6tDYDKHxryOtXXopQnERf6g7iYesDmYoPfoN

I believe every loan officer that does FHA loans should be aware of the new guideline changes before issuing FHA pre-approval letters. Realtors owe it to their clients to ensure that their lenders are up to date with these FHA and other Agency loan program changes. If you have any FHA or Agency loan questions, you can email me at Hans.Iduma@imb.com or log onto my website, www.hiduma.imbhomelending.com for fast underwriting decisions and quick closing turnaround time. My team and I boast 99% ontime closing for purchase loans only.