New FHA Financing Guidelines

FHA announced new changes to their financing guidelines on January 20th, 2010. By all accounts the new changes are a victory for home buyers.

The following are the changes announced on January 20th:

* The upfront mortgage insurance premium (UFMIP) will increase to 2.25% up from 1.75%. FHA will continue to allow the financing of the UFMIP.

* Borrowers with a credit score below 580 will be required to have at least 10% down payment. The minimum down payment will remain at 3.5% for all other borrowers.

* FHA will seek legislative authority to increase the annual premium (currently capped at .55%). Over time, increasing the annual premium may allow FHA to reduce the up-front premium.

* Seller concessions will be reduced to 3%, down from the current 6%.

In addition, FHA will make the following lender enforcement changes:

* FHA will implement credit watch terminations at lender underwriting.

* Public reporting of lender performance through scorecard system will be implemented.

* FHA will implement, through notice and comment, indemnification against lenders. Indemnification will be expanded beyond fraud and misrepresentation.

* FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.

* FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.

Are you or someone you know in need of a real estate professional? The Grove Team can assist you with all of your home buying and selling needs. The Grove Team can be contacted directly:

Office (817) 337-0000
info@groveteam.com

www.groveteam.com

Updates provided to the Grove Team, Keller Williams Realty by Prospect Mortgage.