FHA Changes and Updates for 2010
March 11, 2010
FHA insured loans have become the most popular financing in the past two years. These loans were popular in the past, but with the advent of the 100% financing available in the first decade of the 21st century. (This is a contributing factor to the relatively low number of FHA foreclosed properties.) With the demise of the 100% financing and the tightening of down payment and credit qualifying requirements, FHA insured loans have become a popular financing tool.
Yesterday I attended a workshop hosted by the NAHREP. On of the panel members was Nancy West, Marketing Outreach for the Department of Housing and Urban Affairs. She addressed the changes and the common myths about FHA loans.
First, she clarified that FHA is not needing to ask Congress for a bailout. The FHA insurance fund is solvent and has sufficient monies to cover the losses they have when they foreclose. Because of the insurance premium paid by every FHA borrower, the actual lender suffers no loss in the foreclosure as this insurance fund pays the lender the outstanding loan amount. FHA takes the property into its inventory and then offers it for sale. You can go to http://www.hudpemco.com/ for a list of HUD properties available for purchase.
2) FHA (Federal Housing Authority) does not make loans. It insures loans made by FHA approved lenders. FHA does not have a FICO score requirement. It is the lenders who determine what FICO scores will be sufficient to qualify for the loan they will make.
3) FHA is a subsidiary of HUD as is RESPA.
4. Effective April 5, 2010, the up front insurance premium (MIP) for an FHA insured loan will increase to 2.25%.
5. Currently the down payment requirement is 3.5%.
6. At the present time, anyone, family, agents, etc. can contribute up to 6% of the costs of obtaining the financing. There has been significant discussion about reducing this contribution to 3%. Some lenders have already changed their rules to the 3% amount.
7. There have been changes to the regulations regarding approval of condominium projects. Only projects that have bee approved since 2008 are approved. If you are planning a condo purchase, it will be important to be aware of the guidelines for FHA approval.
Changes are in the air, so if you are planning to purchase a home in 2010, it might be wise to do so sooner rather than later.
FHA insured loans have become the most popular financing in the past two years. These loans were popular in the past, but with the advent of the 100% financing available in the first decade of the 21st century. (This is a contributing factor to the relatively low number of FHA foreclosed properties.) With the demise of the 100% financing and the tightening of down payment and credit qualifying requirements, FHA insured loans have become a popular financing tool.
Yesterday I attended a workshop hosted by the NAHREP. On of the panel members was Nancy West, Marketing Outreach for the Department of Housing and Urban Affairs. She addressed the changes and the common myths about FHA loans.
First, she clarified that FHA is not needing to ask Congress for a bailout. The FHA insurance fund is solvent and has sufficient monies to cover the losses they have when they foreclose. Because of the insurance premium paid by every FHA borrower, the actual lender suffers no loss in the foreclosure as this insurance fund pays the lender the outstanding loan amount. FHA takes the property into its inventory and then offers it for sale. You can go to http://www.hudpemco.com/ for a list of HUD properties available for purchase.
2) FHA (Federal Housing Authority) does not make loans. It insures loans made by FHA approved lenders. FHA does not have a FICO score requirement. It is the lenders who determine what FICO scores will be sufficient to qualify for the loan they will make.
3) FHA is a subsidiary of HUD as is RESPA.
4. Effective April 5, 2010, the up front insurance premium (MIP) for an FHA insured loan will increase to 2.25%.
5. Currently the down payment requirement is 3.5%.
6. At the present time, anyone, family, agents, etc. can contribute up to 6% of the costs of obtaining the financing. There has been significant discussion about reducing this contribution to 3%. Some lenders have already changed their rules to the 3% amount.
7. There have been changes to the regulations regarding approval of condominium projects. Only projects that have bee approved since 2008 are approved. If you are planning a condo purchase, it will be important to be aware of the guidelines for FHA approval.
Changes are in the air, so if you are planning to purchase a home in 2010, it might be wise to do so sooner rather than later.
posted by shirley harry at 8:42 AM
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