New FHA MIP Fee Changes Took Effect October 4th

Up Front MIP will decrease from 2.25% to 1%. Annual MIP will increase from .50/.55 to .85/.90 for terms greater than 15 yrs. What this means is that home buyers will pay less to get into a home, but will pay a higher monthly payment under the new amounts. FHA will make the premium fee changes on all new case numbers effective October 4, 2010.

Fannie Mae Homepath Loans Updates

Fannie Mae on Thursday announced an expansion of the company’s REO program, HomePath.com.

HomePath already offers owner-occupant buyers 3 percent down with no mortgage insurance. The expansion gives these home buyers up to 3.5 percent of the final sales price to use toward paying closing costs. A home warranty also will be available.

New Minimum Credit Scores for FHA Loans

On Sept. 3, the US Department of Housing and Urban Development (HUD) released Mortgagee Letter 2010-29, Minimum Credit Scores and Loan-to-Value Ratios. Effective Oct. 4, borrowers with a credit score below 500 are not eligible for FHA-insured mortgage financing. Borrowers with a credit score between 500 and 579 are limited to 90 percent LTV, which requires a 10 percent downpayment. Borrowers with a credit score of 580 or higher are eligible for maximum financing, which requires a minimum 3.5 percent downpayment. Borrowers with nontraditional credit histories may be eligible for maximum financing.

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