New FHA Policy Changes Will Impact Potential Home Buyers!


FHA just announced some sweeping policy changes that will impact all of our businesses and I wanted to share them.  

In a Mortgagee Letter that is to be released tomorrow, January 21st, and that will go into effect in the spring, FHA stated that in order to better manage its risk and at the same time strengthen its capital reserves; it has announced the following policy changes:

1.  Increasing the Upfront MIP from 1.75% to 2.25%.

      They have also requested legislative authority to raise the annual MIP from its current level of .55% – (no new percentage was suggested)

2.  They are reducing the seller concession 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.)

There are some other minor changes to the monitoring of FHA lenders as well as the requirement for credit score and down payment. However, most of the lender’s underwriting overlays already take tthese into account and thereby make these changes moot.

  As you can imagine, these changes will certainly hamper some of your potential buyer’s ability to purchase a home, so I wanted to make you aware of it, so that you can be prepared. I will continue to monitor this and any other news that will potentially impact our businesses. If you have any questions or want more details, I can forward on the actual press release.

HomeLoansbyJohn.com                        contact me: john(at) hsoaga.com

Leave a Reply