FHA Changes

[DallasLoanGuy]

Here are the 5 things you need to know about these changes:

1. Changes are effective for case numbers assigned on or after April 5th, 2010.

2. New upfront mortgage insurance premium (UFMIP) will be 2.25% for all purchase and refinance loans. The premium for H4H and HECM is 2.0%.

3. This change applies to all standard FHA Single Family Programs except the following: Title I, Section 247-Hawaiian Homelands, Section 248-Indian Reservations, Section 223e-Declining Neighborhoods or Section 238c-Military Impact areas in Georgia and New York

4. Annual premiums will not change at this time.

5 There will be no discount on the UFMIP for first-time homebuyers with pre-purchase counseling.

Message Edited by DallasLoanGuy on 01-22-2010 02:36 PM

[ShanetheMortgageMan]

I didn't see any other thread on the upcoming FHA changes other than Dallas' post here, so wanted to bump it up.  In addition to the new UFMIP changes, FHA will also be reducing allowable amount of concessions (credits) to 3% from it's current level of 6%.  There is no official date on when that change will occur yet, but it's suggested it will happen this summer.  The last change is to increase down payment requirement to 10% for borrowers who have less than a 580 credit score (this is the lowest median credit score from all borrowers on the loan), also to go into effect this summer.  The last one isn't as big as it would've been a year ago, when it was common to find FHA lenders who were OK with sub-580 scores, but as of now the industry standard is a 620 or 640 score, so impact is minimal.

[Anonymous]

2. New upfront mortgage insurance premium (UFMIP) will be 2.25% for all purchase and refinance loans. The premium for H4H and HECM is 2.0%. What was it before the changes? Can it be rolled in to the loan?

[Anonymous]

Do you guys know if you are just applying for FHA right now whether a borrower would get their application number and be far enough along in the process to still get the old rates and rules?

I just got clocked out of the USDA GRH loan, and now looking for the next best option.

[ShanetheMortgageMan]

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@Anonymous wrote:

2. New upfront mortgage insurance premium (UFMIP) will be 2.25% for all purchase and refinance loans. The premium for H4H and HECM is 2.0%. What was it before the changes? Can it be rolled in to the loan?

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1.75%, and yes it can either be rolled into the loan or paid out of pocket.

[ShanetheMortgageMan]

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@Anonymous wrote:

Do you guys know if you are just applying for FHA right now whether a borrower would get their application number and be far enough along in the process to still get the old rates and rules?

I just got clocked out of the USDA GRH loan, and now looking for the next best option.

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Not sure what you mean by "old rates & rules", can you explain?   The FHA guidelines that affect an FHA loan are the guidelines that are in effect when the FHA case # is ordered.  The FHA case # is ordered after information on all borrowers is known and a property has been identified.

[Anonymous]

Hmmm.  I guess i wasn't very clear what I was asking.  when do the FHE changes take effect?  If I get an application in right now, will I slide in under the former 1.75% rate, or is anything new automatically going in at 2.25%?

Thanks!

[Anonymous]

I think what sparked my thoughts about the dates is item number one at the top of this thread says changes take place after April 5th.  So the real questions is: when do account #'s get assigned?  Soon as you apply or once it is approved?  Is there still time to get an application and be assigned a number under the old rates and rules?

[ShanetheMortgageMan]

Ah I gotcha, sorry I wasn't following.  The new increased MIP and what not is applied to FHA loans for case #'s ordered on & after April 5th.  Still plenty of time to get an FHA application in and still be under the current guidelines, but key is that a property needs to be identified as the FHA case # follows that property.  So if you haven't found a property until April 5th, the new FHA guidelines will apply.