FHA Requirement Changes Coming?

HUD is playing with the idea to modify the requirements to get an FHA loan. Currently some things on the table that are being discussed in smoke-filled rooms with poor lighting are increasing the down payment from 3% to 5%, limiting the amount of money that seller’s can contribute to buyer’s closing costs from 6% to 3% and increasing the minimum FICO score from 500 to something that isn’t 500 (they haven’t given a number on that yet). A little known fact about the FICO score is that although FHA will allow a score close to that now many banks are not issuing loans to scores below 620.

Incidentally, if you feel your score is low and want to do something about it, don’t believe you are without options. We can help you with our strategic partners to increase your score so you can qualify to purchase a home. Sometimes it only take a few weeks to get your scores where they need to be to become a home owner.  There is no cost or obligation. 

What is spurring these FHA changes? There is a rule on the books that mandates FHA has a 2% minimum in reserves. They are currently below that. Keep tuned in here to see what changes ultimately come to fruition.

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Alan Strange, and The Strange Team, has a comprehensive website focusing on Denver Real Estate. Buyers can search all of the active Colorado MLS listings for homes Fast, Free and Easy. Alan Strange has served on the commission for nearly two years. In addition to community service Alan runs a real estate team for Keller Williams Realty.