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Changes to FHA Financing Requirements Affect Scripps Ranch Real Estate

Changes to FHA financing requirements affect buying and selling

 Scripps Ranch Real Estate


If you are thinking of buying or selling a home, town home or condominium in Scripps Ranch or anywhere else in the United States, the following information regarding FHA home lending may be important to you.  The  Federal Housing Administration  (FHA) insures home loans, allowing buyers to purchase new homes with as little as 3.5% down payment.  Currently the maximum loan amount in San Diego county is $697,500.  As the major source of "low down" financing as banks tighten their lending, the FHA has become a  significant player in housing's weak recovery.

Recently, FHA Commissioner David Stevens announced the following changes to FHA insured home loans:

  • The FHA will raise the up front Mortgage Insurance Premium, paid by borrowers, from 1.75% to 2.25%.  This premium may be added to the loan amount and paid over the life of the loan.
  • The FHA will request legislative authority to raise the annual mortgage insurance premium, currently the factor is .55.
  • To qualify for the 3.5% down loans the buyers will now be required to have a FICO score of 580 or better.  Those with lower scores will be required to put down at least 10%.
  • The FHA will reduce allowable current "seller concessions, or how much the seller can help the buyer, from 6% to 3%.
  • The FHA will be dropping the 90 day "flipping rule" through the end of 2010.  Sellers may now sell Scripps Ranch homes and condominiums using FHA financing without the requirement that the seller own the property for more than 90 days.


What does this mean to the buyers  and sellers of Scripps Ranch Real Estate using FHA financing programs?

  • Fewer buyers will qualify for the 3.5 % loans.
  • Buyers using FHA fianancing will payer higher upfront mortgage insurance premiums and possibly higher yearly mortgage insurance premiums. 
  • The amount of allowable "sellers concessions" to buyers will be reduced.
  • Sellers may resell a property they have owned for less than 90 days with the buyers using FHA financing. 

For more any information on buying or selling real estate contact:

Claude Braunstein & Associates

Posted on February 02, 2010 19:31:10 by Claude Braunstein & Associates

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