FHA and Tighter Lending Standards Could Negatively Impact the Storm Lake, Iowa Real Estate Market
The FHA is looking into changing some of its lending standards for FHA backed loans in an effort to reduce the number of defaults and limit the risk to the FHA portfolia. Some of these changes will include the amount of down payment required (currently set at 3.5%) and credit score a buyer will need, what percent of the closing costs the Sellers is allowed to pay and an increase in the annual mortgage insurance premium. This is bad news for a lot of first time homebuyers. The FHA has become an important option for home buyers, insuring almost 30% of home purchases-more than 75% of which are to first-time home buyers-20% of mortgage refinancings. Just three years ago, the FHA's share of the mortgage market was 3%. Read the full story here.