I wanted to alert you all to the fact that HUD is proposing some changes to the FHA program. These changes are not a “done deal” at this point.
One of the changes that I wanted to point out is in regards to seller concessions. HUD is proposing that FHA seller concessions will be reduced from the current maximum of 6% to 3%. This change could have an impact on many first time buyers as they often struggle to come up with the required cash to close.
On April 5 2010, HUD will be increasing the cost of the upfront Mortgage Insurance premium that is financed into all FHA loans. The current premium of 1.75% will be increasing to 2.25%. The premium will still be allowed to be financed into a buyers mortgage.
Therefore, I think it is important that we underscore to potential buyers that now is the time to act. Interest rates remain at historic lows, and the homebuyer tax credits are set to expire as of April 30 (with a June 30 closing).
Any buyer that is waiting to purchase a home may be subjected to a higher cash requirement, higher mortgage payment due to the increased cost of the mortgage insurance and that’s before we talk about the risk of interest rates rising.
Any questions please feel free to call
Sam Geraci
716-633-2700 ext 3123
Tags: FHA, HUD, mortgage, mortgage payments, mortgage rates, PMI
February 8th, 2010 at 8:16 am
Thank you for the information. I have been trying to avoid foreclosure and this helps me put things in perspective