This is some very important information in this link. One of activerain's members is David Stevens, Assistant Secretary of Housing - FHA Commissioner, has posted the following blog for our review. This is the most current and accurate information available regarding new changes in the FHA.
http://activerain.com/blogsview/1450362/changes-at-fha
What does all this mean? This coupled with the fed not buying mortgaged backed securities (http://online.wsj.com/article/SB126291088200220743.html) as of March 1st leading to a 1% rate increase in addition to a tax credit expiring April 30th means there has not been a better time to buy.
What changes will be implemented? (announced the following on January 20):
- Increase the up-front mortgage insurance premium (MIP) to 2.25%;Simply put, more money upfront to buyer, previously 1.5%. In some cases upfront MIP can be a part of the loan if seller concession is made see line #3. This will go into effect in the spring.
- Update credit score and down payment requirements for new borrowers;580 and above ok, less than that will need 10% down or greater. This will go into effect early summer.
- Reduce seller concessions to three percent, from six percent. 250k purchase you could get up to a 15k concession including upfront mortgage insurance and all other closing fees. That is now reduced to $7500 so with the example above it leaves you 1875 for other closing cost and pre paids. With the guideline's a 3% seller concession of 3% will not cover all closing cost. The borrower will have to bring some money to closing for closing costs. This goes into effect early summer.
- Implement a series of significant measures aimed at increasing lender enforcement. Lender held liable and responsible for loans the originate and underwrite. Effective immediately
Comments(0)