FHA Expected To Announce New Standards

From Corbett B. Daly at Reuters: US housing agency ups mortgage deposits for some

The U.S. Federal Housing Administration said on Tuesday it will raise the minimum down payment required to secure an FHA-backed mortgage for less creditworthy borrowers as part of a series of steps to shore up the agency’s finances.

It also said it would increase the up-front mortgage insurance premium, which is paid by the borrower when the loan is made, to 2.25 percent from 1.75 percent.

The FHA said borrowers with credit rating scores below 580 would be required to make a down payment of at least 10 percent, while the rate for higher-ranked borrowers would stay at 3.5 percent.

…..

The FHA also said it was cutting the amount of aid sellers could provide buyers to 3 percent of the purchase price from 6 percent, a move it said could help lessen incentives to inflate appraised home values.

There is a lot more details in the article! It seems the FHA is learning its lessons the hard way by tightening their standards.

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Tags: Housing Market, Mortgage Rates

This entry was posted on January 20, 2010 at January 20, 2010 and is filed under Housing Market. You can follow any responses to this entry through the RSS 2.0 feed.