The FHA just released some significant FHA loan changes. Currently, the upfront mortgage insurance (MI) premium for FHA loans is 1.75% of the loan amount. Once the new rules go into effect, that will jump to 2.25%. For example if someone is doing a FHA loan for $417,000, the upfront mortgage insurance premium will increase from $7297.50 to $9382.50. Remember that the upfront MI can be financed into the loan.
Also, the allowable seller concessions decrease from 6% of the purchase price to 3% of the purchase price. (This means that the USDA will be one of the few loan programs that allow 6% seller concessions.)
Lastly, the minimum credit score for 3.5% down may increase to 580. If someone has credit below 580 they will have to put down a minimum of 10%.
This information was gathered by Kathryn Pedersen and Holly Rogers at Yampa Valley Bank. They can be reached at 970-875-1609.
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