FHA’s market share was 3% as recently as 2006. Now, 30% of purchases and 20% refinances are FHA.
As a result, the Federal Housing Administration ( FHA ) is in the process of drafting new policies to address the quality of FHA’s current portfolio and improve the performance of future loans.
Changes under consideration include:
- Reduce the maximum permissable seller concession from 6% to 3% – current 6% level exposes FHA to excessive risk by creating incentives to inflate appraised values.
- Raise the minimum borrower FICO score ( currently 620 or higher with most FHA lenders )
- Increase down payment requirements ( currently @ 3.5% ) FHA wants borrowers to have more “skin in the game.”
- Increase funding fee ( currently 1.75% )
This is not good news for home shoppers and homeowners. When these proposals pass it will become increasingly more difficult to obtain financing.
So, if you’re in the market to buy a home or refinance the time is now!
- Sub 5% 30 yr fixed mortgage rates
- Tax credit for home buyers
- Home affordability near all time low
What are you waiting for?
Posted by Scott Fowler. Scott can be reached @ 864-527-8900 x 104 or SFowler@HorizonFinancial.org. Visit Scott’s website @ www.ScottFowlerTeam.com
