FHA lending changes

I received the handout below from a lender friend of mine.  I realize I have recently posted changes to FHA’s lending policies, but this handout concisely summarizes the recent changes quite nicely.  Plus, it doesn’t hurt repeating in case it may have been missed the first time around.

New FHA guidelines in a nutshell:

  • Increased upfront mortgage insurance premiums
  • Higher FICO scores required
  • Reduced seller concessions
  • No more “90-day flipping rule”

Click on the doc below to enlarge…

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2 Responses to FHA lending changes

  1. Avatar GratefulD_420 says:

    This looks to have a significant impact on the lower end market, <200k, that has been red hot (velocity=good sales qnty and dropping inventory) and so many suggest the segement has seen the bottom.

    There is one caviot for flippers, getting rid of the 90-day flip rule.

    However all the remaining rules should greatly reduce the FHA buyers… which I believe is a huge force in the market? Anyone know the % of FHA backed loans in recent months?

    Feds are stopping the early entry buyer with…
    1.) Above posted FHA lending change
    2.) End offer for $8,000 Tax CREDIT
    3.) Stop purchasing mortgage securities

    Top it off with Federal woes, Regional Woes (CA) and local apathy (Reno)…. the job picture economy and budgets are a wreck….THERE WILL BE NO BOTTOM AT ANY SEGEMENT.

  2. Avatar 3niner says:

    I disagree.

    There are many qualified buyers out there, who are simply waiting for a sign that a market bottom is near. These people can and will buy low end properties, when the time seems to be right.

    The FHA changes mostly drive out unqualified buyers who would become next year’s defaults.
    🙂

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