A HUD release from Wednesday gives the details on some proposed and upcoming changes and how they will make it hard for home buyers to obtain FHA financing this Spring and Summer.
A summary of important changes:
MIP Mortgage Insurance Premium Increase 2.25%
Max Seller Contributions Reduced from 6% to 3%
This is the total amount sellers can pay to help buyers who lack the cash for prepaids and closing costs. It is a percent of the purchase price.
FICO Score Affects Down Payment Amount
A minimum FICO score of 580 is required for a 3.5% down payment. Lower scores will mean a 10% down payment.
Watchdog and Public Reporting
They are also stepping up their monitoring of lender performance and compliance and increasing their ability for the enforcement of these regulations. They will be reporting lender ratings on their website to hold them publicly accountable starting in February.
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