New FHA Guidelines

~What the new FHA Guidelines Mean For you~

As of February 1, 2010 FHA guidelines will be changing see below for a quicklist of important changes that will impact all new FHA loans.

• No more 90 day flip rule
• If value of a purchase has increased over 20% in the last 90 days a 2nd appraisal will be required
• No new "spot" approvals as of 2/1/10
• Condo projects will either need to be already FHA approved or the lender will have two options to ensure that the project is acceptable to FHA guidelines: DELRAP (Direct Endorsement Lender Review and Appraisal) or HRAP (HUD Review Approval Process). DELRAP will be significantly quicker than HRAP, which is expected to take 4-6 weeks from submission date.
• FHA Upfront Mortgage Insurance Premium is scheduled to go from 1.75% to 2.25%. FHA is also asking Congress to raise the monthly MI which may result in a lesser upfront MIP (expected implementation in the spring 2010)
• Down payment to increase from 3.5% to 10% for borrowers with credit score at 580 or less. Otherwise, the down payment is expected to stay at 3.5%. One bill in Congress is asking for 5% minimum down payment.

Wall Street Journal Link:

http://online.wsj.com/article/SB10001424052748704320104575015013235518270.html?mod=WSJ_HomeAndGarden_sections_RealEstate

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