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%.