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FHA changes now and coming soon

Posted on September 22, 2008 by Ray Williams (NMLS #216267).

More and more even the likes of FHA which hasn’t changes lending guidelines in almost 60 years, has added a couple key changes to pay attention too.

As of 9/19/2008, if you are moving out of your place and making it a rental you pretty much can count on needing to be able to qualify with that house payment, and the one you are about to buy. It used to work out where you could use 75% of the new lease on the house you were moving out of and turning into a rental home.

However, FHA, like Fannie/ Freddie has found that many people were moving out of their homes, to then in turn let the other house go into foreclosure, after they were able to buy the new one and get moved in. As a result if you read earlier in my posts, I mentioned when Fannie Mae made these changes.

The net effect is IF you change jobs or are transferred from your current job (and it is not recognized as a reasonable commute) and it forces you to move, you may be eligible to use that rental income (off house you are moving out of). OR if you have 25% equity in the house you are moving out of then you can use the rental income to offset your debt.

COMING SOON~

Effective January 1,2009 you will be required to make a 3.5% down payment when using FHA to buy your home. This goes up from the current 3% they require now.

Meaning if you are buying a place at $220,000 you will be required to make a $7,700 ($220,000 x .035) down payment. Seller concessions towards your closing costs will still be allowed to 6% of your purchase price.

If you are thinking of buying soon, let me know so we can make sure you are on the right track to home ownership~

Ray 303.779.0591 ext 101

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