Today the Federal Housing Administration announced it will make some policy changes in regards to obtaining an FHA insured loan.
H
ow does this affect you as a home buyer?
Here are the highlights:
- The Up-Front Mortgage Insurance premium will be raised from 1.75% to 2.25%. This amount is many times rolled into your loan so you don't have to pay it up front. They are also requesting the authority to increase the annual Mortgage Insurance Premium. This will go into effect in early spring.
- They will now require a minimum FICO score of 580 to qualify for the 3.5% down payment program. If your FICO score is below 580, be prepared for a 10% down payment. Many lenders require a minimum FICO score of 620 to obtain a loan anyway, but for those that don't, this new development will affect how much money you need to save up for your down payment. This will go into effect in early summer.
- Previously, you were able to ask for up to 6% seller concessions. The NEW REQUIREMENT states you cannot ask for more than 3% in seller concessions. This will go into effect in early summer.
There are other new changes that will impact the lenders, but the three points above are applicable to YOU, the buyer.
If you'd like to see the press release from the FHA, Click here...
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