In a recent article, FHA Loan Pro’s indicated there are a few key changes FHA borrowers can expect to see in this coming year. The first FHA mortgage lending guideline change is the down-payment requirement; a change that we’ve heavily covered and seen some borrowers face since late last year. For all new loan submissions after January 1^st, FHA home mortgage purchases now require a down-payment of at least 3.5 %, rather than 3% like they did prior to 2009.

The other changes have been a few note-worthy updates to the FHA appraisal requirements became effective on January 1st 2009. One new product guideline change for 2009 is that more FHA loans will now require two appraisals to be eligible for FHA.  As you may already know HUD now requires FHA lenders to use state certified appraisers for their FHA mortgages. If you missed the story, you can view our previous post here. Essentially, by limiting themselves to state certified appraisers, HUD limits its exposure to possibly exaggerated or over inflated appraisals.

FHA Now Requires 2 Full URAR Appraisals

Just last month, HUD announced a change in requirements for 2nd appraisals that would take effect January 1st of 2009. In the letter supplied by HUD, a 2^nd  appraisal will now be required for all cash out refinances where LTV exceeds 85 % of the appraised value. Before, a second appraisal was only required if the home was located in a declining market, the loan was above $417,000, and exceeded a 95 % loan to value ratio. If you still meet these three requirements, you’ll still need that second appraisal as well.