Kathy A. Torline-Nordstrom
ERA Herman Group Real Estate
Serving Colorado Springs
FHA Loan Changes
For a free Buyers Guide, Email Kathy Torline at [email protected]
Did you know that in 2009, the Federal Housing Administration (FHA) insured nearly 30% of the single-family mortgage market and that more than 50% of all first-time home buyers used FHA programs? I haven’t been able to find any facts to support this, but I think number if lower for homebuyers in Colorado Springs, as many of the military population relocating to Colorado Springs use VA Loans to finance their purchases.
As of April 5, 2010, FHA loans changed their upfront mortgage insurance premium from 1.75% to 2.25% of the loan amount. Additionally, an annual MIP (mortgage insurance premium) of 0.55% of the loan is charged on a monthly basis. These measures are intended to help the FHA better manage its risks, while continuing to provide affordable, responsible mortgage products. The annual MIP is automatically eliminated when the loan amount is reduced to 78% of the original purchase amount.
There have been several other changes including a reduction in maximum seller contributions from 6% down to 3%.
Another change is that new borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 FICO score will be required to put down at least 10%.
If you want to read the complete Press Release from HUD, here a link to the article.
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