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New FHA Guideline Changes That Become Effective on July 14th

John Nunnally
Mortgage Advisor
Carolina First
Phone: (864)809-3700
Fax: (866)318-8259
john.nunnally@carolinafirst.com
GoCarolinaFirst.com

New FHA Guideline Changes

That Become Effective on July 14th

06-16-08

I wanted to get this out to you guys so that you were aware of the new FHA Guidelines. These are some major changes that will effect your clients and their ability to get an FHA loan.

FHA Announces Risk-Based Premiums
For the first time in history, credit scores will be utilized in FHA lending. All LTB members are encourage to review the important FHA guideline changes that become effective on July 14th, 2008.

Let's take a closer look at the ten primary changes to the FHA guidelines:

1. Borrowers with either no score or at least 500 may get an LTV >90%.
2. Borrowers with a score less than 500 get a maximum LTV of 90%.
3. Borrowers without scores will require manual underwriting.
4. Upfront Mortgage Insurance Premiums will range from 1.25% to 2.25%, depending on score.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on score.
6. The premium is based on the borrower with the lowest score.
7. If one of the borrowers has no score, then the Non-Traditional credit grade is used.
8. Credit rescoring is allowed to improve a borrower's credit grade. 9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI.
10. These changes apply to cash-out, rate & term, and non-delinquent FHA Secure refinances.

I have the actual mortgagee letter from FHA if you would like the full details. Please feel free to call and talk with me about these new guideline changes and how it will impact your clients or have your current clients call me with any questions.

It's even more important now than in the past 15 years for everyone to maintain excellent credit. Good credit does not cut it anymore! Scores below 680 will cost you thousands of dollars in the long run. For more information on cleaning up your credit or obtaining a free credit report you may visit www.creditscientist.com

Posted by John Nunnally on 06/17/2008 09:25 AM

Comments (2)

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2 Comments on New FHA Guideline Changes That Become Effective on July 14th

Great explanation on the breakdown of how credit will effect overall LTV for prospective borrowers with this type of loan.

06/19/2008 11:11 AM

by Jonas Kruckeberg (Watermark Capital, Inc)

Thank you for this info. I hate to sound ignorant in front of clients, but I'm an agent, not a mortgage guy. The more I learn, the better I'll look to my clients. This stuff is still very hard to grasp sometimes. Thanks for a good, understandable article.

07/27/2008 08:54 PM

by Karl Burger - Pensacola Real Estate News (ERA Beach Ball Realty)

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