Raising of FHA Guidelines for Spring 2010

HUD.gov

January 20, 2010 the Federal Housing Administration (FHA) announced the following changes coming this spring to FHA loans:

*Upfront mortgage insurance premium (MIP) raised from 1.75% to 2.25%
*Borrowers with FICO scores below 580 will have a required downpayment of at least 10%
*Allowable seller concessions lowered from 6% to 3% (seller concessions meaning the amount of closing costs the seller can pay on behalf of the buyer)

Commissioner David Stevens explained “Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important. When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”

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