FHA Guidelines Announced. (It could have been worse.)

Give me an “F”! Give me an “H”! Give me an… well, you get the point.

I know you have all been sitting at the edge of your seats waiting for the final shoe to drop. Today FHA Commissioner David Stevens announced the changes to the government insured loan guidelines we have been anticipating.

In short:

1. Up front mortgage fees will increase from 1.75% to 2.25%. Buyers will still be able to finance these fees.

2. Minimum FICO scores of 580 will be required. They will be required, that is, if you covet the 3.5% down payment. For lower credit ratings, you will be looking at a minimum 10% down payment requirement.

3. Seller allowable concessions will drop from 6% to 3%. As I have written before, this is really moot. Good luck artificially bumping your offer price by even 3% to reflect seller credits if you want the offer to be accepted or the appraisal to come in on target.

Exciting stuff for a Wednesday, this is. I would add my two-cents commentary, but we have pretty much beat this horse here. Plus, I have a little matter of several escrows to open this morning.

As a side note, honorable mention goes to FHA’s one-year suspension of the flipping rule, the rule which formerly prohibited FHA insured financing on a home which had been purchased within the previous 90-day period. I have personally had several buyers run into this bad boy over the past few months, so I offer my thundering applause on this change. It was a rule which never made much sense in the first place.

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