FHA To Change Guidelines…How Will It Effect Knoxville Home Buyers??
January 20th, 2010 categories: Buyers, General, Market Trends, Sellers
Patti Francisco with Wells Fargo sent along information on this anticipated announcement from HUD today relaying changes to FHA lending terms in it’s continued effort to shore up the program against increasing financial losses and the threat of needing a government bailout.
The changes being announced are expected to be:
- Increase the Mortgage Insurance Premium which is collected at closing and most often financed with the loan from 1.75% to 2.25% of the loan amount.
- Require that any borrower with a credit score less than 580 put down 10%. 3.5% down will continue to be required by HUD with credit scores equal to and greater than 580. ***Note that most lenders apply their own credit policy overlay on top of the HUD credit score requirements, i.e. Wells Fargo currently has a credit score minimum of 600 for our FHA transactions. Most other lenders have a 620 or 640 FHA credit score minimum.
- Seller concessions will be limited to 3% of the purchase price versus the currently 6% limit.
There is currently nothing posted by HUD or FHA to confirm this information that is being released through the media. There is currently no date for implementation and I’ll pass along any new information as I receive it.
Patti is my preferred lender and works with me offering my Buyer411 program to buyers. If I can help make you home search more enjoyable and less painful please call me at 865-675-8326 or email me.
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The Buyer 411 5 Step Program To Help You Buy A Knoxville Area Home
