Here they are, Major Changes to FHA Just Announced
Recently announced on January 20th 2010, FHA has announced major changes to ensure its long-term Financial Soundness. These changes will allow FHA to continue to be the Number One Choice for First Time Home Buyers that are obtaining a Mortgage in order to purchase a Home. Here they are:
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The Upfront Mortgage Insurance Premium will increase by ½ percent. Currently the upfront MIP is at 1.75% and will soon change to 2.25%. This is scheduled to take effect by Spring 2010. To clarify, the Upfront MIP is financed into the loan amount.
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Next month FHA will be releasing an Announcement, stating what many Real Estate Professionals have already known is that Borrowers with a credit score of 580 or lower will soon be required to have a 10% down payment invested in the property. For all others borrowers, theminimum down payment will remain at 3.5%. This is expected to take effect in the Summer 2010.
· Now this next change hurts, next month FHA is announcing that Seller concessions will soon be limited to a maximum of 3%. Currently Sellers may pay up to a total of 6%. This is expected to take place in the Summer 2010.
· Next month FHA is also making another announcement regarding the proposed increase of the Monthly Mortgage Insurance Premium. Currently FHA borrowers pay a monthly MIP amount of .55%. While this change must first be “Approved by the Legislation” which will take time it is expected to pass. No date has been projected as to when this will happened.
· Next month, effective on February 1st, 2010, FHA will be utilizing “Neighborhood Watch”. The FHA Connection Neighborhood Watch allows authorized users to monitor FHA mortgage delinquency patterns in a geographic area, by lender or by loan details. FHA loans that go delinquent after ninety days within the first three years are trackable. For more information on this visit: FHA Neighborhood Watch.
H Have a Real Estate Question, call Kathy Hyatt at 954-347-0244 or visit www.KathyHyatt.com