On January 20, 2010, the Dept. of Housing and Urban Development announced upcoming changes to the FHA insured loan program.
These changes will include the following:
. Raising the up-front mortgage insurance premium: The premium will rise to 2.25 percent from itscurrent 1.75 percent. This change will be effective for FHA loans for which a case number has been issued on or after April 5, 2010.
. Raising the minimum credit score requirements: New borrowers will be required to have a minimum
FICO score of 580 to qualify for the FHA's 3.5 percent down payment program. New borrowers withless than a 580 FICO score will be required to put down at least 10 percent. FHA expects this to take effect in early summer after it goes through the normal regulatory process.
. Reduce allowable seller concessions: The agency is lowering the maximum permissible level to 3 percent from its current 6 percent limit. FHA expects this to take effect in early summer after it goes through the normal regulatory process.
These changes are intended to rebuild the capital reserves of the FHA, but will make it more expensive to acquire an FHA insured loan.
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