FHA Update

On November 18^th, FHA will be implementing new guidelines. Here are some of the highlights. Also, for the complete FHA announcement, please read the, FHA Streamline letter ML-09-32. On Streamlines, there will be a 6 month payment seasoning period required. If you have had your loan less than 12 months, you cannot have any late payments. If you have had your FHA loan over 12 months, “you cannot have more than one 30-day late payment in the preceding 12 months, AND have made all current payment for the three months prior to the date of application”. Also, there has to be a net tangible benefit to the borrower, examples are; Going from an AMR to a Fixed rate, or reducing the term of the loan, ex. From a 30 yr to a 15 yr. The reduction in payment must be at least 5% from the current payment. You can also go from a Fixed to an ARM, and in those cases, the rate must be at least 2 % lower. If you go from an ARM to a Fixed rate, the payment cannot exceed by more than 20% from the current payment. All of this information was found on the following link, http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-32ml.doc

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