Ouch! Here is an article about a couple of the new FHA rules trying to get finalized. I think the raise in the upfront mortgage insuranc premium is bit much. In other words, if you are buying FHA , on a $100,000 loan you will have $2,250 tacked onto the loan because you are using FHA. On the down payment part, a lot of lenders are not lending FHA to people that have a credit score below 580 anyway.
The Federal Housing Administration will raise the minimum down payment for its least credit-worthy borrowers, agency announced Tuesday.
Borrowers with credit-rating scores below 580 will be required to put down at least 10 percent. Those with a credit score above 580 will be able to continue to put down only 3.5 percent. The changes are intended to shore up the agency's finances.
The FHA also will increase its upfront mortgage insurance premium from 1.75 percent to 2.25 percent. The agency is expected to seek congressional approval to raise annual mortgage insurance premiums, paid by borrowers over the life of the loan, above the current 0.55 percent maximum. The amount it will seek has yet been announced.
Source: Reuters News, Corbett B. Daly (01/19/2010)