August 29, 2011
On Wednesday January 20, 2010, the FHA announced policy changes geared toward addressing risk within the administration and strengthening its finances. Not surprisingly, the changes are at the expense of potential borrowers. The full text of the FHA policy announcement can be found here.
Some of the highlights include:
- increasing up front mortgage insurance premium costs by 50 basis points to 2.25%
- increase minimum FICO score to qualify for FHA’s 3.5% down payment program to 580
- reduce allowable seller concessions from 6% of sales price to 3%
The FHA Commissioner maintains that the changes, along with a commitment to increase lender enforcement of FHA policy, will enable the FHA to remain the “largest source of home purchase financing for underserved communities.”