26th January 2010

FHA Announces Changes for 2010

posted in Uncategorized |


On January 20, FHA announced some policiy changes to strengthen its capitol reserves and better position FHA to manage its risks while continuing to support the housing market recovery. Overall, it looks like the new changes are a good balance between the need to make necessary financial reforms and the need to keep FHA Loans available to a large segment of homebuying consumers. The evidence is that FHA has retained the 3.5% minimum downpayment – althought now you must have a certain minimum credit score.


These are the changes FHA has announced:


  • The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FHA will continue to allow the financing of the UFMIP into the loan.
  • Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.
  • FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the upfront premium.
  • Seller concessions (such as seller paid closing costs) will be reduced to 3 percent from 6 percent.

FHA will make the following lender enforcement changes:

  • FHA will implement credit watch terminations at lender underwriting.
  • Public reporting of lender performance through scorecard system will be implemented.
  • FHA will implement, through notice and comment, indemnification against lenders.  Indemnification will be expanded beyond fraud and misrepresentation.
  • FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
  • FHA will seek legislative authority to sanction lenders nationwide based on performance of a local branch.

Bottom line, FHA will remain one of the best sources for home loans if your cash for downpayments is low, (or you prefer to keep more of your cash) and if your credit scores are not all that stellar but at least 580.

Feel free to contact Robert Whitfield at 678-585-9691 for more information or a referral to trusted lenders.

This entry was posted on Tuesday, January 26th, 2010 at 9:56 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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