Phoenix FHA Loans to Tighten in 2010
Anyone who knows that they will be purchasing via an FHA loan in the coming months, but has been sitting on the sidelines, needs to get in the game NOW...if you are really serious about buying.
HUD Secretary Shaun Donovan has promised that starting in 2010, it will become more difficult to qualify for an FHA loan.
Some of the proposed changes are as follows:
1. Minimum credit scores will increase, with tighter underwriting guidelines (meaning less flexibility in your credit). Currently minimum credit scores are between 620 and 640, depending on the lender.
2. Higher down payments - currently at 3.5% and could go to 5%. (So if you're looking at buying a home for $150,000, the current down payment is $5,250....wait a couple months and it could be $7,500).
3. Lower closing costs paid by the seller - suggestions have been to reduce this amount from 6% down to 3%.
4. Higher mortgage insurance premiums, which will make payments go up.
So...why the need for the changes, because FHA loans that are delinquent by 30 days or more stands at 14.4%, which is extremely high. Additionally, they are required by law to maintain 2% in cash reserves, and these reserves have now fallen to 0.53%...(they were at 3% this time last year), thus, they are doing something now...before they too (like Fannie and Freddie) will need a bailout..though that has still not been ruled out!!
The facts are simple - it's going to get much more difficult to get a loan in 2010.
So, if you've been one of those "fence sitters" waiting for everything to align just right....it's already here...lowest rates in history, all time lows in prices, and the newly revised buyer tax credit. You couldn't ask for a more "Perfect Storm". 
Contact me today!