www.lasvegasmtg.com Report: FHA Announces change in Fees effective this spring. The FHA announced Fee increase will raise the Mortgage Insurance Premium from 1.75% to 2.25%. FHA is also seeking legislative approval to raise the annual premium charge further from its current rate of .55% to a undisclosed percentage rate.
FHA announced changes to the sellers concessions will be lowered from the current 6% of the sales price to a maximum amount of 3% of the purchase price.This will require for the borrower to come in with more money on lower end purchases because fees are typically running 4.5% on loans less then $100,000.00. With most first time buyers having little savings other then down payment this will create a problem for some potentially good borrowers.
FHA announced changes from the current no FICO score to a minimum FICO score to 580. FHA announced changes to the down payment requirement for score with a minimum score of 580 will be require a 10% down. While this seems reasonable most lenders and the investors that buy the loans in the secondary market have already raised the minimum FICO Score for FHA Loans to 620 and some lenders to 640. As most lenders will not do any loans less then 620 there probably be very view of these loans closed and is more political to show FHA is not the sub prime product that is being portrayed.
On December 3rd 2009 I wrote in a earlier blog " titled "FHA proposed changes and how it might affect The Market in Las Vegas, Nevada". that the changes were being proposed was due to the fact that FHA Mortgage Insurance funds had been reduced to .53% less then the Congress set amount of 2%.
With these changes and with future changes that are guaranteed to happen some qualified good borrowers will be priced out of their Dream Home!