MORE FHA CHANGES Effective September 7, 2010

Mortgage and Lending with 1st Preference Mortgage 214107

Here we go again folks!  FHA is making more changes with regards to the up front mortgage insurance premium and the rate charged on the monthly mortgage insurance.  You can read all about it in summary and in full using this link,

In a nutshell, the current UFMIP is 2.25% of the loan amount and it will be reduced to 1% which sounds like a great thing doesn't it?  The monthly mortgage insurance will be increased from .55% to .85% or .90% depending on the loan to value. Hmmm.... not so great.  Even though the up front amount is reduced, the monthly increase boils down to about $65 more per month for the borrower.  This is based on a $250,000 purchase and ballpark numbers but gives you a pretty good idea of what's going on.

This change will increase the ratio's thus lowering the buying power of most buyers.  It may not seem like much to some but for first time buyers, it does. 

Luckily this change will not effect th following FHA programs: Title I, HECM, HOPE for Homeowners (H4H), Section 247 (Hawaiian Homelands), Section 248 (Indian Reservations), Section 223 (e) (declining neighborhoods), Section 238(c) (Military Impact areas in Georgia and New York).


Comments (9)

Pasadena Short Sale Agents Pasadena Short Sales
Munson Realty Southern California Real Estate - Pasadena, CA

Thanks for the update!

Aug 05, 2010 08:15 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Thanks for providing us with the updated information.  I didn't realize the monthly amount was going up so much.

Aug 05, 2010 08:17 PM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Give something, take something, it's always something. Thanks for the update.

Aug 05, 2010 09:28 PM
Randy Ostrander
Lake and Lodge Realty LLC - Big Rapids, MI
Real Estate Broker, Serving Big Rapids and West Central MI

Hard to keep track of all the changes in our world. By the time I respond things have changed again. Thanks for the update Lora.

Aug 05, 2010 10:09 PM
Kelly Milligan
First Title Real Estate, LLC - Slidell, LA

Thanks Lora for the update.  I didn't see the assistance from the seller addressed in the summary.  Did they change that from 6% to 3% like they were talking about?

Aug 05, 2010 10:43 PM
Roy Kelley
Retired - Gaithersburg, MD

Good post and important information for many home buyers. Most would save by buying now.

Aug 05, 2010 11:36 PM
Lora Graetzer
1st Preference Mortgage - Nottingham, MD
Licensed Loan Originator

Hi Everyone!

Just posted a new update you might want to check out!


Aug 10, 2010 06:48 PM
Mike Young, covering the USA - Las Vegas, NV
FHA 203k Consultant 916-758-1809

Lora, do you all do the 223(e) loan program at this time? I thought it was on hold but I have several clients wanting to do them, some in your area.

Jul 22, 2012 08:46 AM
Lora Graetzer
1st Preference Mortgage - Nottingham, MD
Licensed Loan Originator

Hello Mike!

Thank you for your inquiry but we don't do the 223E loan program.  We offer the 203K renovation and rehab loan but not the one in question.

Good luck with your search.


Jul 28, 2012 11:48 AM