FHA increased Up Front Mortgage Insurance Premium to 2.25% for all FHA loans. This premium is added into the loan amount which will mean higher loans and higher monthly payments and will cause some buyers who were qualified before to no longer qualify for the current purchase price. This change is effective for all FHA purchase and refinance transactions (including Streamline Refinances) with case number assignment dates on or after April 5, 2010. This is a FHA mandated change so exceptions cannot be made.
We are still waiting to hear if the FHA will adjust the minimum down payment from 3.5% to 5% and lower the seller concessions allowed from 6% down to 3%.
Information provided by Coldwell Banker Mortgage Advisor Michelle Piccari.
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