HERE ARE THE NEW CHANGES ON FHA LOAN. As I mention on November 2009 the following are the changes on the FHA home loans programs. These changes are designed to ensure FHA's long-term ability to guarantee affordable mortgages for qualified home buyers.
Please read them so you will be more inform and able to understand what to expect from such changes.
-An increase in the Mortgage-Insurance Premium. The premium will rise to 2.25% of the loan amount.
-You will need a better FICO score. In order to qualify for a low 3.5% down payment you will need to have no less than 580* FICO score otherwise you must provide a 10% as a down payment. This change will be register in February of this year and will go into effect by Summer 2010.
-Seller contribution will not exceed 3%. At the moment, you can negotiate up to 6% toward closing costs so first time home buyers can use the minimum amount of money in the purchase of a home. The new guideline will be into effect this summer.
-Increased enforcement on FHA lenders. This will help to check, control and be able to know what lenders are doing. The changes are effective immediately.There are more proposed changes to be reviewed by HUD and FHA. I will keep you inform of such changes and make sure you understand every single one of them. As I always say, the more inform you are, the best options you will have to get a fair and win win mortgage loan.Should you wish to get more information, would like to get a FHA loan before changes proceed, you are welcome to call me anytime.
*This is up to lender's guidelines. Some of them could required a better FICO score.