Today’s FHA Changes Rattle Some Cages
In an effort to reign in its shrinking reserves, the Federal Housing Agency today announced several changes that will affect the entire real estate industry. Some say the new changes are a step in the right direction to help stop the number of foreclosures and continue to help homebuyers buy homes.
• Some of the changes that will be implemented include:
• Increasing mortgage insurance premiums from 1.75% to 2.25%
• Increasing down payments to 10% for buyers with credit scores lower than 580 that want FHA-backed loans
• Lowering seller fees from 6% to 3%
Other real estate industry professionals fear that the tougher requirements in an already difficult market will simply drive away consumers looking to buy a home. This is a real worry since lending has been very tight for buyers of all economic levels.
The FHA currently insures 30% of all mortgages in the US, a huge concern for FHA Commissioner David Stevens. The agency has already provided a much needed kickstand for a suffering industry, it would wise for them to tread carefully so as not to completely drain their reserves.
These changes will definitely have a ripple effect throughout the industry. Time will tell how much of an effect and whether it’s a good or bad one.
0 comments:
Post a Comment