Now that “they”, the powers that be have decided that all the government issued help hasn’t done what it was meant to do, and they’re afraid of FHA going the way of Fannie Mae and Freddie Mac, we can get ready for some new rules to play the real estate foreclosure game. Real Estate financing is still changing, trying to find another way to keep homeowners in their homes, and put new families into affordable housing.

We all have heard the rumors about FHA being the next entity to go under. On Jan. 20, 2010 FHA announced changes to strengthen and stabilize themselves, while working on several occasions with the National Assoc. of Realtors to keep it a viable resource for homeowners and home buyers. One thing NAR did score was keeping the down payment minimum requirement at the current 3.5 % and allowing the upfront mortgage insurance premium to be financed. What FHA did do was raise the premium from 1.75 to 2.25%.

The other change regarding financing that wasn’t in place before will be that borrowers with a credit score of 580 or below will be required to put down a minimum 10%, instead of the allowed 3.5% for prime borrowers. One thing they did that may open the door to more sellers co-operating with FHA financing, is reduce the seller concessions from 6% to 3%, making it a little more attractive. This would also open the market for home buyers.

FHA also says it’s going to crack down on lenders. In the past, they always say they have their rules, but cannot force the lenders to go by them. The lender may have their own requirements. Now they are planning on implementing a sort of “watch system” to see that their FHA endorsed lenders are actually lending. That is a big score for home buyers.

Tomorrow, Fannie Mae news regarding down payment assistance.

FNHXY7GJ8NF2