FHA Raises Fees and Loan Standards
As reported by the AP on Wednesday, the Federal Housing Administration will soon be raising their fees and tightening their standards in order to bring more revenue for the agency. Expected to occur in spring or early summer, two major changes will be made:
1. The upfront mortgage premium will increase, from 1.75% to 2.25%. “A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500 (AP).”
2. To qualify, borrowers will need a credit score of at least 580. (There was previously no standard credit score, although some lenders still required one.) If a borrower’s score is lower than 580, they will need at least 10% for downpayment.
The FHA does not make actual loans, but offers insurance against default. The new changes are considered some of FHA’s biggest steps in history addressing risk.
Tags: changes, fha, fha loans, new regulations
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