CHANGES in FHA Financing !! Changes on the way - You need to read this if you are planning on purchasing in the near future through FHA Financing !!

FHA Changes – They are a comin’

After much discussion and speculation, HUD has officially announced some significant changes to the FHA program this morning in an effort to address credit risk concerns and shore up FHA’s loan loss reserves.

A summary of proposed FHA policy changes and timelines for implementation are:

·         Increasing Mortgage Insurance Premiums

• The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.

   

• If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.

   

• The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

   

• Update the combination of FICO scores and down payments for new borrowers.

   

  • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%. (our investor overlays of a minimum 620 score already apply)

     

  • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

     

• Reduce allowable seller concessions from 6% to 3%

   

  • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

     

• Increase enforcement on FHA lenders

   

  • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.

     

  • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.

     

    • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.

       

    • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.

       

  • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process

     

    • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.

If you have any questions please contact Myrtle Beach, SC's Top Real Estate Team

 Jake Lee 843-240-0431 for more details! You can also visit him on the web at www.SCRealEstatePartners.com where you can find a free foreclosure list for Myrtle Beach Real Estate, Pawleys Island Homes for Sale, Surfside Beach Short Sales, AND MORE!!

When you're sick, you choose the BEST doctor? When you need legal assistance, you choose the best attorney? When you need to buy or sell Real Estate in South Carolina, choose the best Realtor around.. Jake Lee!