Per Fred Campbell of F&M Mortgage, Brentwood http://www.fredshomeloans.com: January 2010 FHA announced some changes to take affect soon. Those changes will affect Buyers’ ability to qualify, monthly mortgage amount, and down payment. Those changes are: Higher lump-sum mortgage insurance premium a/k/a MIP (from 1.75% to 2.25%); Higher credit score requirements for loans with 3.5% minimum down payments (from 580 to 620), and sales concessions lowered from 6% to 3% (closing costs, etc. paid by Seller on Buyer’s behalf). Good news is the changes should actually affect Buyer’s bottom line very little. Since August of 2007 obtaining FHA loans with 580 credit scores has been virtually impossible anyway. Most investors had ‘overlays’ which mandated scores of 620. The increase in MIP is necessary for national loan stability (based on the current delinquency rate of 14.4%). So actually it is a prudent change for our nation as a whole that will have little effect in Buyer’s monthly payment. For example a mortgage payment will increase only $5.37/mo on a $200,000 loan @ 5%.  Finally, 3% covers most of Buyer’s closing costs anyway. Few Buyers have asked for 6% seller-paid closing costs in this tight “buyer’s market” anyway. Anything above 3% paid by seller has typically been used to buy a discount of the interest rate…and then the price was raised to cover the extra 3% in most cases, which voided the actual value to Buyer.  So the changes to Buyer’s bottom line are actually very slight. It is still a great time to get an FHA loan! Buyers are required to have 3.5% down (unless THDA or a Housing program is used). I welcome the opportunity to council or pre-qualify FHA Borrowers.   Per J. Charles Kelly call 24-hr recorded message 1-800-718-5607 x 1526 …to leave your contact information and receive details…by email or fax …about 1) ZERO DOWN mortgages such as USDA Rural Development and THDA, 2) Fannie Mae Foreclosures requiring only 3% down and guaranteed 3.5% towards Buyer closing costs and/or new appliances; and 3) The $8,000 and $6,500 Tax Credit (must contract by April 30 and close by June 30, 2010).

by J. Charles Kelly (JCK), RE/MAX Elite www.JCharlesKelly.com