FHA Mortgage Guidelines 10% Down for Low FICOs

Posted on January 22, 2010 by admin 
Filed under FHA Credit, FHA Guidelines, FHA Mortgage Articles, FHA Mortgagee Letters, FHA news, FHA requirements · Tagged:

FHA continues to alter their FHA mortgage guidelines in an effort to improve its depleted cash reserves.  A few days ago, the Federal Housing Administration unveiled tighter FHA guidelines with changes to the FHA requirements for underwriting new home loans and refinancing.  For the first time, FHA credit requirements will penalize applicants with challenged credit.  One of the FHA requirements changes will mandate larger down-payments for borrowers with bad credit or low FICO scores. In addition FHA will increase in the upfront mortgage insurance premium to 225 basis points.  We also anticipate FHA, to expand their criteria for mortgage refinance guidelines in 2010.

FHA commissioner David Stevens declined to provide any guidance on how much money the changes will raise for the reserve fund. Most of the new FHA guidelines outlined Wednesday will go into effect in the next few months. The 10% down-payment is required for borrowers with FICOs of less than 580. The MIP will be increased in a few months from the current charge of 1.75 basis points.

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