Reminder: FHA Down Payment Changes 01/01/09

Mortgage and Lending with Your IRA guy!

Don't forget-because it's just around the corner, that FHA down payment changes go into effect on January 1st.  The changes will be.....

  • Down payment minimum of 3.5%.  Currently it is 3% total but in most areas it is 2.25% down with .75% being able to come from closing costs.  Not it is 3.5% plus whatever closing costs are involved unless seller pays them subject to 6% seller contribution maximum).
  • The loan amount included the upfront Mortgage Insurance (UFMIP) can not exceed 100% of purchase price or appraisal-whichever is less. 

Acceptable gift funds may still be used (relative, employer, etc.....just not the non-profits) and cash out refinances are still at 95% Loan to Value

  • FHA Maximum Loan amounts are DECREASING for the Twin Cities 11 county metro area
    • Currently: $365,000
    • Revised $318,550

Outside of the Twin Cities metro area the maximum loan amount will remain unchanged @ $271,500

 Don't get to the closing table only to find out things are no loner approved.....Double check with your lender to make sure your approval and/r pre-approval letter is still valid!

BTW, rates have dropped so please keep me in mind!


Comments (1)

Denise Gray
Realty World Alliance - Wichita, KS
Realtor SRES, Wichita Kansas Homes


Can we use sweat equity as part of the downpayment?

Example: New construction, Buyer wants to put in the laminate wood floor themselves or paint exterior and/or interior of home.

Dec 07, 2008 08:08 AM