Changes to FHA Guidelines for Buyers
Well, it was predicted that FHA was going to make some changes and they were just announced today. These are the changes that buyers need to knnow about"
* Upfront MIP raised to 2.25% from 1.75%. This will be effective in the Spring on case assignments and the date is not known yet. Once I know, you will know.
* HUD has put in a minimum FICO of 580 for the 3.5% down payment. This change will go into effect sometime in the summer. Note, however, that investors have already raised the limit to 620 minimum so this is really not a big change for our industry, although there is a good possibility that we will see the investors go to 640.
* Seller concessions moving from 6% down to 3%. This change will be posted sometime in February and will have an effective date in the early summer. Again, once I know the date, you will know it.
* Additional enforcement on lenders has been announced. There will be additional information posted along with the neighborhood watch starting in February. This effects mostly the way that lenders approve mortgages and we will see additional investor/industry guidelines because of this change.
NOW is the time to purchase.
Current FHA Guidelines that buyers will qualify for NOW:
* Seller can pay up to 6% of sales price of buyer's closing costs. Per HUD, this will change to 3% seller contribution in the next few of months requiring the buyer to have more money to purchase.
* Monthly MIP is .55 of base loan amount and the Upfront MIP is 1.75%. This will change in the next couple of months to 2.25% for the Upfront MIP. And there are rumblings that the monthly MIP will also increase- however, nothing has been put in writing yet of the monthly MIP increase.
* NO Minimum FICO score is required although the market is dictating a 620 norm with some investors already requiring 640. There is a good possibility that 640 will become the norm by mid year.
* FHA allows Non-Occupying co-signers for income only. FHA loans are the only loan that allow a relative to co-sign for the borrower and do not require the borrower to have any source of income.
* FHA allows Federal Tax (IRS) Tax Liens
To begin your search for the perfect home or to sell your home in Northern Virginia, call Kim Darwaza at 703-856-2254. Please visit http://www.kimdarwaza.com to search the MLS for Northern Virginia listings.