Good news has come out from the Federal Housing Administration.
The current 3.5% minimum down payment remains unchanged, as long as borrowers have FICO scores of 580 or above. Under 580 and the down payment jumps to 10% of the purchase price early this summer.
In April the upfront mortgage insurance premium will increase from 1.75% to 2.25%, this will add $1000 on a $200,000 loan. The amount of seller concessions (where the seller pays the buyer's closing costs) will be reduced from a maximum of 6% to 3%.
These changes are being made to help build FHA's capital reserves back up to statutory minimums, as they had fallen below 2% in 2009.
FHA insured almost 30 percent of all purchase loans and 20 percent of total refinance loans during the 12 months ending Sept. 30. First-time homebuyers accounted for nearly 80 percent of FHA-backed purchase loans in the second quarter of 2009, and almost half of first-time buyers relied on FHA-insured loans.
For more information, go to www.MaineHouseValues.com