Higher Costs, Tougher Standards In Store For 2010 FHA Mortgage Financing
Last week HUD Secretary Shaun Donovan announced applicants seeking FHA financing are going to face higher costs and tougher credit standards. What does that mean for home buyers? Changes being proposed include higher down payments – currently 3.5% but could go as high as 5%; seller concessions cut to 3%; mortgage insurance premiums as high as 3% and a minimum acceptable FICO score not much lower than 620 (which is the score currently used by both Fannie Mae and Freddie Mac.)
In addition, Wells Fargo also announced changes to its’ FHA Condo criteria which went in to affect on 12/8/09. One item to note is “no more than 50% of the units are occupied by units other than the primary residents.” Does your condo association currently have a process to track rentals? How will your association answer this question on the form? There are many other questions that my be difficult to answer or a "wrong" answer could result in a loan being denied? If you'd like to know more about the new FHA guidelines see our checklist.