Bay Area FHA News: FHA changes in 2009-

As the New Year has finally begun, I wanted to point out two key changes FHA borrowers can expect to see in this coming year. The first issue has been the change to the FHA down payment requirement; as of January 1st 2009 FHA purchase loans will now require a down payment of at least 3.5 percent.

The other changes have been a few key updates to the FHA appraisal requirements which also began on January 1st 2009. One thing new for 2009 is that more FHA loans will now require two appraisals to be eligible for FHA.

FHA Second Appraisal Requirements
In December of 2008, HUD announced a change in requirements for second appraisals that would take effect January 1st of 2009. In the letter supplied by HUD, a second appraisal will now be required for all cash out refinances where LTV exceeds 85 percent of the appraised value. Before, a second appraisal was only required if the home was located in a declining market, the loan was above $417,000, and exceeded a 95 percent loan to value ratio. If you still meet these three requirements, you’ll still need that second appraisal as well.

Most notably, first time homebuyers and investors have found that the combination of lower mortgage rates and discount homes have made it a prime time to buy. And since FHA “increased” its maximum loan limits to $625,500 permanently in certain areas, many are still finding ways to take advantage in this current housing market.

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