FHA Loans and FHA Mortgages

FHA loans are now acting slightly based on previous foreclosures and first payment defaults. Yes, there is some risk in any loan. HUD/FHA has been around since 1934 and even though they truly pride themselves on helping first time homebuyers and those with challenged credit, they are now raising certain requirements. Nobody ever is in business to take a loss on anything.

I delayed in writing about this, as so many others have been publishing this new change and the chart, because it was never official. So many loan officers fail to realize that anything that is agreed upon with HUD, is not official until they send out their mortgagee letter. Hud released this mortgagee letter 08-16 on June 11^th, 2008. So it’s now official. Any and all FHA loans that are registered with a FHA case number on or after that July 14th, 2008 will be affected by this change.

This new change is either positive or negative, depending on what side of the fence that you sit on. It will reward those with higher credit scores and in some cases, if you have 5% or more down. This chart is for both those that are purchasing or refinancing. The new change is for calculating both the Up Front Mortgage Insurance Policy (UFMIP) and Monthly Mortgage Insurance (MMI).

** This chart was copied from the HUD mortgagee letter  :  mortgagee letter 08-16 **

Overall, some will think that this is negative or discriminating. But FHA still makes this very affordable for most homebuyers or those refinancing. In order to make sure that you understand this chart and how FHA loans can work for you, you need to speak to a mortgage professional. Not everyone that says that they can do FHA mortgages, will be able to help you effectively. The chart is very self explanatory, but if you have any questions, please don’t hesitate to e-mail me or call me.  jbelonger@ihmci.com