Changes to FHA Policy Set For Oct. 1by Tim Manni
As part of the housing rescue bill passed this summer, the Federal Housing Administration is set to institute new regulations come October 1. The FHA will raise their minimum down payment amount to 3.5%, up from 3%. Buyers will no longer be able to seek down-payment assistance from the seller or non-profit organizations.
The FHA is also planning on increasing their fees beginning October 1. Buyers will now have to pay an upfront mortgage insurance premium of 1.75% on their loan amount instead of 1.5%, as well as annual premiums of .55%, up from .50%.
These stricter regulations have been implemented to further prove the strength of the borrower’s ability to repay the loan, reducing the risk of potential default.