New FHA Guidelines – Coming Soon to Tucson

In an announcement earlier this year, HUD announced changes to FHA home loans.

Starting early April 2010:

  • the upfront mortgage insurance premium will increase from 1.75% to 2.25% of the loan amount.
  • seller contributions to buyer costs cannot exceed 3% of the purchase price, down from 6%.
  • borrowers will need a FICO score of 580 or better to qualify for the 3.5% down payment.

FHA financing is incredibly popular with first time home buyers here in Tucson, though you don’t need to be a first time home buyer to get an FHA loan.  A lot of first timers have good jobs, decent credit, but don’t have the cash savings for larger down payment amounts.  Starting soon, those FHA home buyers are going to pay a bit more for the homes that they purchase.  I don’t think these changes are going to bump a whole lot of people out of the market – at least that’s my opinion given the first time home buyers I typically work with in Tucson.

The Mortgage Report Man Dan explains it in greater detail here (who can now lend in Arizona, by the way).

Equal Housing Opportunity Realtor