FHA to increase Mortgage Insurance & Down Payment
In an attempt to recoup past losses, reduce the potential for future losses and sure up FHA’s sagging reserves a staggering series of changes will be implemented “soon”. Click here for article
First, and most immediate, the Up-Front MIP for all FHA loans will be increased from 1.75% to 2.25%. The start date for this increase will be announced today but Ianticipate it will begin with case numbers assigned starting February 1st. Following this in “the spring” will be an increase in the monthly MI fee as well.
Second, down payment requirements will be increase for 3 1/2% to 10% for “low FICO score borrowers” (under 580). This change is expected to be implemented “early summer”.
Third, the level of allowable “Seller Concessions” will be cut in half from 6% to 3%; this also will be implemented “early summer”.
Fourth, increased monitoring and enforcement on FHA lenders effective immediately.
These changes are H-U-G-E and will affect the entire market. While just loosening the anti-flipping rules 48 hours ago, this changes tighten – good for taxpayers, bad for sellers, buyers and the real estate markets.
For these and other breaking stories, stay in touch and call Todd Abelson and Tyler Ford at Sunstreet Mortgage in Tucson Arizona.