Let's not get it twisted. FHA has only "officially" changed their upfront MIP from 1.75% to 2.25%. Per their latest Mortgagee Letter, this change will be effective on all new case numbers on 2/5/2010. There are others changes in the works but they are on the discussion table. They include a possible decrease in allowable seller contributions from 6% to 3%. HUD is also changing their minimum credit score requirement and tweaking their required down payment. If you have less than a 580, then you will need 10% down. Greater than 580 they will still allow you to put 3.5% down. This change will not affect many of us as the average score needed by most banks (who supply the funds) is 620.
It's fair to say that we all need to hold on to our seats as more changes are on the horizon. Just remember that you must see an official mortagee letter before any changes are official. The mortgagee letter for the Flipping Rule should be out on 2/1/2010. More on that in my next post.
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