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.
ABOUT THE AUTHOR Kris Berg is Co-Owner and Designated Broker of San Diego Castles Realty. If not-so static web sites are your thing, go here at once where you will find loads of real estate information including homes for sale, market trends, floor plans and more. Kris's hobbies include fencing and spot welding. She likes kittens. 
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{ 5 comments… read them below or add one }
Love your articles. Informative, witty and you have aknack for cutting through the stuff….
Thank you
Mike
any idea when these rules take effect?
Howard,
Everything I have read says these changes will take effect Feb. 1st. Isn’t that right Kris?
Mike
I agree with you Kris – I’m chanting FHA. They have to survive especially with producing half the loans in most areas of California in 2009. We knew these guidelines were coming, no surprises here.
The MIP should take effect around April 5, 2010. The monthly premium increase could take effect in late Spring/Summer, along with the increased down payment and reduced seller concession. And stricter enforcement on lenders – well that’s happening now.
On Feb. 1st the 90 day flip rule waiver will take effect which we should all be very happy about.
Jonas
Thanks, everyone, for having my back. I have been buried in escrows.
Jonas, I believe, is correct. The flipping rule is Feb. 1; the FHA guidelines are to become effective “in Spring.” That’s not to say that many lenders, ala Wall Street, won’t start jumping on the bandwagon sooner.