Just 3 weeks after the end of a historical year in our industries now on January 20th I get an email that states:
FHA Commissioner David Stevens held a press conference to announce continued fundamental procedural and future legislative program changes.
3 critical priorities:
* Produce adequate capital reserves to meet the 2% requirements
* Insure the change do not disrupt the housing market
* Do not disrupt the ability to support the under-served markets.
The commissioner announced four specific areas of change:
1. The front end MIP will be increased from 1.75% to 2.25%. The change will be announced 1/21/10 with a Spring 2010 effective date.
2. Update the combination of FICO scores and LTV maximum:
* FICO's less than 580 will see down payment requirements increase to 10%
* This change will be announced in the Federal Register for comment
3. Reduce seller contributions from 6% to 3% to conform to the conventional market. This change will also be announced in the Federal Register in February for comment.
4. Increase enforcement of FHA Lenders.
Full press release is available on the IMMAAG site: http://www.immaag.com/FHAPressReleaseJanuary
This will certainly tighten up the buyers market. Why have FHA financing when they are trying to get it to conform to Fannie & Freddie. What a shame.