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Is FHA new sub prime?
As much as I have welcomed new limits for FHA loans when the same got raised few weeks back. Click here to look up your County it makes me wonder if this will be our new sub prime market?
  Are we pushing our buyers that are not in the best financial place again?
 
 Just as a good reminder here are requirement for FHA loans.
Requirements for New FHA-Insured Loans:
___ New FHA loans must be properly underwritten and must be based on current appraised value of the house and borrower's documented income (borrowers with higher (but not disqualifying) debt levels would need to make six months of timely payments at the new FHA payment level to qualify for the guarantee);
___ New FHA loan must extinguish all existing liens and meaningfully reduce the borrower's mortgage debt service;
___ New FHA loan must be within applicable FHA loan limits;
___ HUD will set reasonable limits on loan fees and interest rates; and
To reduce costs to the government - and avoid inappropriate enrichment to the borrower - the government will retain a second lien on the property. When the borrower sells the home or refinances the loan, the borrower will pay from any profits the higher of ... more

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