CNN/Money Reports:

 "It's going to be harder to get a government-backed mortgage from now on. Looking to shore up its weakening finances, the Federal Housing Administration has announced stricter standards. The agency, which insured nearly a third of new mortgages in 2009, will increase the premium it charges for its mortgage insurance and require those with weaker credit scores to come up with larger down payments. The FHA will also reduce the amount of money a seller can provide a homebuyer for closing costs, as well as tighten its enforcement of lenders."

 Now some borrowers will have to make a 10% down payment and there are some in Congress considering forcing FHA to increase all down payments to 5.0%.  These moves come after FHA has tightened guidelines with regard to financing those who have had short-sales, appraisal requirements, FHA streamline refinances, condominium financing and more. 

There is no doubt about the fact that FHA is THE program in this market. FHA is rapidly approaching a 40% market share and remains the one hot program in a market in which most other programs have tightened requirements significantly or been eliminated from the menu. Well, this equation is rapidly changing with new requirements being issued it seems every week. These new guidelines include:

  • Waiver of property flipping rule
  • New appraisal guidelines delayed until February 15 
  • Deregulation of the 1.0% Origination Fee
  • Proposal to eliminate broker approval requirement.