FHA Announces Policy Changes
In order to better manage it’s risk the FHA has announced the following changes:
#1. Increase the up-front mortgage insurance premiums (MIP) from 25 basis points to 2.25%. This will allow for the capital reserves to increase with less impact to the consumer since this fee is paid over the life of the loan.
#2. New borrowers will be required to have a minimum mid FICO score of 580 to qualify for the 3.5% down payment. Borrowers with a mid FICO below 580 will be required to put down at least 10%.
#3. Reduce seller paid closing costs from 6% to 3%.
FHA will also seek to increase enforcement on FHA lenders which will hold lenders more accountable for their actions. FHA is also continuing to review its overall response to housing market conditions.
For more information regarding FHA mortgages contact me directly at 702.526.3133 or by e-mail at mjgarnes@gmail.com
