FHA Guidlines are getting tighter for April 2010

http://www.homecatchnews.blogspot.com/
The Federal Housing Administration is raising mortgage insurance (MIP) rates, reducing seller concessions and tightening credit-score rules to combat a rise in delinquencies, making a government-guaranteed mortgage slightly more expensive for U.S. homebuyers.
Effective with new FHA case numbers issued on or after April 5, 2010, The up front premium (UFMIP) FHA charges to insure mortgages will rise to 2.25 percent from 1.75 percent .
Example of the UPMIP change – As most of you know, Upfront MIP is typically financed into the loan amount and made part of the P & I payment. The extra 1/2% on the total does not change the payment as much as it appears. . On a $300,000 loan, the increased MIP would total an additional $1,500. This equates to an additional $8 per month over the life of the loan.- Not the end of the world, but more costly? …….Yes
REASON FOR THE CHANGE? The agency, which guarantees almost one-third of loans used in home purchases, is grappling with a 14 percent delinquency rate after taking on more risk to resuscitate the housing market when private industry sources evaporated. Defaults pushed mortgage insurance reserves to the lowest level in history last fiscal year, prompting the Obama administration to take bolder steps in shoring up the FHA’s finances.
Other changes pending on the FHA Horizon (likely late spring/early summer)
Borrowers who have credit scores below 580 will also have to make down payments of at least 10 percent,
Seller concessions will be capped at 3% (currently at 6%)
Monthly MIP may also be raised (currently .55% annually)