FHA changes for 2010 in the Bay Area—Higher fees and more conditions

FHA changes for 2010 in the Bay Area—Higher fees and more conditions

Looking to FHA for your next mortgage? Get a move on! Although you have until Friday, April 2, 2010 to get your application in, Friday is Good Friday and most banks will be closed.

Your true FHA deadline is Thursday, April 1.

Guidelines Change in 5 Days

In its official announcement, the FHA said it’s trying to better position itself to “manage its risk while continuing to support the nation’s housing market”.

The changes start with case numbers assigned on or after Monday, April 5, 2010.

Reviewing The FHA Mortgage Changes

One widely speculated change wasn’t made — the increase of the FHA minimum downpayment. Homebuyers in California where I’m licensed and elsewhere can still buy with just 3.5 percent down. However, the group did roll out a number of other changes, including:

• An increase in Upfront MIP from 1.75 percent to 2.25 percent

• A plan to reduce maximum seller contributions from 6 to 3 percent by summer

• A Congressional request to increase monthly mortgage insurance premiums

Furthermore, the FHA’s new guidelines institute a minimum FICO requirement of 580 to make the minimum 3.5% downpayment, requiring 10 percent for any applicant whose credit score falls below that level.

2010: The Year of Investor Overlays

But, just because the FHA allows 580 FICOs, banks don’t have to allow it.

Your FHA Mortgage Denial May Be Reversible

Starting immediately, FHA mortgage guidelines will vary from bank-to-bank as lenders get more active about their originated mortgages. Going forward, what gets FHA-approved Bank of America, for example, may not be FHA-approved at Wells Fargo.

If your mortgage has been denied or you just want to have the best chance of being approved possible, call or send me an email with some notes on your situation. I work for Vintage Mortgage Group — a HUD-approved lender.

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