FHA Announces Policy Changes That Tighten Loan Standards
January 22nd, 2010 categories: Mortgage News
In an announcement Jan 20, the FHA disclosed changes to their policies that will affect consumers ability to qualify and obtain an FHA Mortgage. Here is a brief summary of the changes:
- Mortgage Insurance Premium up front cost increased from 1.75% to 2.25%
- New borrowers must have a minimum of a 580 credit score in order to qualify for a 3.5% downpayment. For scores lower than 580 the downpayment is 10%.
- Allowable Seller’s concessions have been reduced from 6% to 3%
- Increase policy enforcment with FHA lenders.
These policies are set to go into effect in late spring and early summer leaving a small window for Buyers that want to purchase using the current standards.
