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FHA is Changing the Rules

by Doug & Gwen Campbell at Sun Bay Associates

Effective September 7, 2010, FHA is adjusting its rates and these will impact home buyers and the value they get for their payment.  Also, FHA is going to reduce the amount of closing costs sellers can pay to 3% from 6%.  All this is addressed in the video below. 

Click here for the very latest in what FHA is up to for home buyers.

FHA Changes Will Cost the Buyer

by Doug & Gwen Campbell at Sun Bay Associates

As reported in the Los Angeles Times recently, the Federal Housing Administration, or FHA, is making changes that will cost the consumer a few more dollars to buy a home.  The FHA needs to make these changes, or increases, to provide a buffer for it's low cash reserves.

Among the coming changes are:  increased mortgage insurance premiums, higher FICO credit scores and down payments and a reduction in allowable seller concessions to 3% from the current 6%.

HUD Secretary Shaun Donovan outlined the FHA proposals in December.  The higher down payment requirement will now require a minimum FICO credit score of 580 instead of the present 500 for a 3.5% down payment on a new home.  Home buyers with FICO scores below 580 would have to have a 10% down payment.  This may not have much impact since most lending institutions already require a FICO score of at least 620. 

Also, the FHA wants to increase the mortgage insurance premium to 2.25% of the loan amount, up from 1.75%.

FHA Puts HVCC on Hold

by Doug & Gwen Campbell at Sun Bay Associates

With the problems that the HVCC has caused in the real estate industry, such as unqualified appraisers killing deals because of complete unfamiliarity with local markets, or simply because of an overall lack of appraisal experience, FHA Commissioner David Stevens recently stated that FHA has no plans to implement HVCC for FHA loans.

This action may help avoid some of the issues caused by out-of-market appraisers killing deals from not knowing the local markets or recognizing the values of specific areas or neighborhoods.

Realtors, mortgage brokers and the home-buying public should take this as very good news.  For an interesting take on this, click here

The bottom line, and it appears to be very good news for now, is that the FHA will not implement the HVCC for FHA loans, at least for the immediate future.

Displaying blog entries 1-3 of 3

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Photo of Gwen and  Doug Campbell - The Campbell Team Real Estate
Gwen and Doug Campbell - The Campbell Team
at Keller Williams Realty
30522 US Hwy 19N, Suite 107 S
Palm Harbor FL 34684
Doug's Cell 727-741-4189
Gwen's Cell 727-741-7260
Fax: 888-447-7908