FHA Borrower Alert: FHA Loan Changes Increase Cost
Below is a bulleted list of the FHA guidelines that were discussed in our DailyBasis post today. The FHA credit score changes don’t have a huge impact on most borrowers because the average FHA credit score is now 681 and median credit score in the U.S. is 720, but the increase in mortgage insurance premiums will require that anyone looking at quotes in recent months will have to get new quotes from their FHA lenders. We’ll confirm timing for implementation of these changes shortly, it appears they won’t be implemented for a couple months. More on this topic in the coming days…
- Down payment for FHA borrowers with credit below 580 is now 10%.
- Higher-credit borrowers can still do as little as 3.5% down.
- The up-front FHA mortgage insurance premium is going from 1.75% to 2.25%. This can still be financed by borrowers who choose to do so.
- HUD is seeking congressional approval to allow it to raise annual mortgage insurance premiums (paid monthly by borrower) above the 0.55 percent maximum.
- FHA allowable seller credits for closing costs is being reduced from 6% to 3%.