Lets start out the year where we picked up and update you on some future changes

FHA Recent Announcement on Policy Changes

The Federal Housing Administration announced today that FHA will be taking active measures to address risk and strengthen finances by announcing policy changes that will affect future FHA loan files. These changes include: Increasing Mortgage Insurance Premium to build up capital reserves. The first step will entail an increase to UFMIP by 50 basis point (2.25). with a follow up request to legislative authority to increase annual MIP. HUD is scheduled to release a Mortgagee letter tomorrow that will be in effect in early spring. (No attachments).

FHA will also implement a New Credit Score requirement for all borrowers. All borrowers must have a minimum score 580 in order to qualify for minimum down payment of 3.5%, any borrowers with scores less than 580 will be required to bring in a minimum of 10%. Please note most lenders require a 640 credit score. Premier Capital Mortgage will not be affected by some of these changes as our minimum credit score for FHA Purchase transactions is 620. These changes will be effective in early summer of 2010.

Lastly, HUD has announced they will reduce allowable sellers concessions from 6% to 3%. This change will be posted in the Federal Register in February and will be effective in early summer of 2010.

Click here for details: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016

HUD Relaxes Anti-Flipping Guidelines – IMPORTANT!

Recently HUD released a memo on relaxing current Anti-Flipping guidelines which would permit a waiver to the existing 90 day seller seasoning guideline. This waiver will be effective 2/1/2010. We have received a number of questions regarding this waiver and the availability to use this waiver for new applications. Please note although HUD has relaxed their requirement for seller seasoning, we are still at the disposal of our investors requirements. Our investors are in the process of reviewing the waiver, and will release subsequent bulletins which will provide further guidance on any overlays if applicable. Please make sure that you advise all clients/referral partners, that although this waiver exists, investors on secondary market may have further overlays. More to follow!