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New FHA Guidelines

//New FHA Guidelines

New FHA Guidelines

The new rules — which are temporary and take effect this summer — come after more than a year of stringent standards from lenders. Among them:

•Better Credit Score — New borrowers will have to have a minimum credit score of 580 to qualify for a 3.5 percent down payment. Previously, there was no minimum score. Those with lower scores will have to make at least a 10 percent down payment. The average credit score of FHA-insured borrowers is 693.

•Higher Insurance Premiums — Buyers who get an FHA-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of total loan amount, up from 1.75 percent now. A $100,000 mortgage would require a payment of $2,250, or $500 more. But buyers can roll the added cost into the loan amount.

•Reduction in Seller Concessions — Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.

2010-02-10T10:45:45+00:00

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 Information Deemed Reliable But Not Guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) nor Hometown Realty shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. 

 

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