In a continued effort to lessen their own risk, FHA guidelines will be changing effective on or after April 5, 2010.  FHA is increasing the up-front mortgage insurance premium from 1.75% to 2.25%. The new premium is effective for all purchase and refinance transactions.  In essence this will result in a higher total loan amount, after the borrower makes the required 3.5% down payment.

If you are an FHA buyer and go under contract before April 5th, your lender must assign the FHA Case number for the transaction by April 4th at the latest in order to secure the lower mortgage insurance premium on the buyer’s FHA loan.

There are also rumors that FHA may also increase the required down payment of 3.5% to 5%, and may also lower the maximum allowable seller concessions from 6% to 3%.  These changes have not been officially anounced by FHA but are possibly on the horizon. 

These factors are some GOOD ADDITIONAL REASON TO ACT NOW!  Remember, the deadline for the First -Time Home Buyer $8000 Tax Refund is obtaining a contract by April 30th, so if you really want to save on the MIP upfront as well as obtain your refund, IT’S TIME TO GET MOVING ON YOUR HOME PURCHASE!

Thanks to Jesse Hardin at Flagstar Lending for this info update! https://www.flagstarloans.com/home.aspx?lo=jhardin