Changes are Coming to FHA Loans Act Fast - Now is the Time to Buy a Home.

Posted by Michael Pannell on Wednesday, January 20th, 2010 at 2:18pm.

Understanding FHA Guidelines & Changes Coming Down the Pipeline.

· Seller can pay up to 6% of sales price of reasonable buyer's closing cost PROVIDED that the buyer has at least their 3.5% into the loan. Per HUD, this will change to 3% seller contribution in the next few of months requiring the buyer to have more money to purchase.

· Loan amount can go up to $271,050 in Dallas/FW (sales price of $280880 with 3.5% down). We are still hearing rumblings of the down payment requirement to be changed to 5%- however, nothing has been put in writing yet of the down payment increase.

· Monthly MIP is .55 of loan; Upfront MIP is 1.75%. This will change in the next couple of months to 2.25% Upfront Mortgage Insurance Premium. Again we are still hearing rumblings that the monthly MIP will also increase- however, nothing has been put in writing yet of the monthly MIP increase.

· Watch Flipping Guidelines! Remember as of 2/1 the 90 day flipping rule is lifted for one year with stipulations- This is a positive change. Ask us if further questions (or see last week's market update)

· NO Minimum FICO score is required (although the market dictates a min 620- some investors are requiring 640). There is a good possibility that 640 will become in the norm by mid year.

· Buyer CAN currently be in chapter 13 BANKRUPTCY*; Purchase 2 years after BK 7; and 3 years after a foreclosure.

· Owner Occupied Only

· FHA allows Non-Occupying co-signers (for income only)- ONLY loan that allows these (Market dictates ratio limits)

· FHA allows Federal Tax (IRS) Tax Liens

· Full Documentation (i.e., W2s, Tax Returns, Bank Statements, etc)

· There are 22 Ways in which a buyer can receive their funds to close including gifts and loans from blood relatives! Need a list of the 22 Ways? Let us know.

With 3.5% down payment still allowed, up to 6% seller contribution, Upfront MIP only 1.75%, low interest rates, good inventory, and $8000 and $6500 Tax Credit through contracts written by April 30 2010........NOW is the Time To Purchase.

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