New FHA Requirements and How it Will Affect You

By
Real Estate Agent with Windermere K-2 Realty LLC www.propertiesinmoseslake.com

So today the Commissioner announced some changes that are in the pipeline for FHA mortgages.  Since I would say today in our area 3 out of every 5 mortgages are FHA this will impact a lot of us in this area.

The FHA has decided to raise up front mortgage insurance costs from the borrower from 1.75% to 2.25%.  They are also requesting permission to increase the maximum MIP that they can chargeDoes it suprise you that an insurance company wants to increase rates?  Doesn't suprise me a bit!

For new borrowers to qualify for a loan if they have a 580 credit score they must now put 3.5% down on the transaction.  For someone with a lower score they will have to come up 10% down on the home.

The bigger change is that sellers can now only contribute 3 % on an FHA sale which is down 3% from what we've normally used at 6%.  It seems they want buyers to have a bigger financial stake in their home by them having to actually put money into it upfront.

FHA loans have gone from a low of 3% of all totals loans to now a high of 40% of all loans.  Here in Grant County that is now probably a estimated of about 75% of all loans so this will impact a majority of our loans in some way.

The biggest impact we will see in our area from this is the loss of 3% of seller contributions.  Some people to qualify for a loan need the full 6% to actually qualify for the loan as they don't have all the needed cash to close.  This will affect how many buyers are out there buying homes here in Moses Lake.

For more information

 

Posted by

                   Heather Adkinson  509-760-7733               

Realtor, ABR, CNE, RCC

Windermere K-2 Realty LLC

Moses Lake, WA, 98837

www.propertiesinmoseslake.com

     

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Comments (5)

Steven L. Smith
King of the House Home Inspection, Inc. - Bellingham, WA
Bellingham WA Home Inspector

Heather,

 

Greetings from Mexico. It is hot and colorful here. Having a great time. Some of the federal laws involving inspectors are changing too, based on a few inspections I have done recently.

Jan 20, 2010 09:31 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

Heather, this is solid information and well explained. Good post!

Jan 21, 2010 09:01 AM
Steven L. Smith
King of the House Home Inspection, Inc. - Bellingham, WA
Bellingham WA Home Inspector

I think that in the years to come, we are going to see more and more oversight by the government. In some ways that might be of benefit, in others a negative that only makes business more difficult.

Jan 23, 2010 02:54 AM
Ryan Ogle
Blu House Properties - Grand Rapids, MI
Relationships. Opportunities. Wealth.

Nice post-thanks for the clear summary. It will be interesting to see how many clients will be directly affected by these changes.

Feb 04, 2010 07:18 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Hi Heather!  Great explanation and much needed information for our buyers!  Like Ryan, I'm curious to see just how many folks are going to be affected by these new guidelines.

Feb 06, 2010 02:34 PM