Best to Buy Before New FHA Guidlelines Takes Into Effect

[Jennifer Griner]

Starting in early summer, the Federal Housing Administration is tightening lending standards in an effort to bolster its dwindling reserves. The new lending standards will make it tougher for some prospective buyers to purchase a home by requiring a higher down payment than the typical 3.5 percent for some borrowers, higher insurance premiums and reduced seller concessions.

Securing FHA-insured mortgages are attractive to borrowers because down payments are only 3.5 percent. Most conventional loans now require 20 percent down, keeping many creditworthy borrowers on the sidelines.

New Guidelines

The new rules — which are temporary and take effect this summer — come after more than a year of stringent standards from lenders.

Click the new rules below for detailed information:

Better Credit Score

Higher Insurance Premiums

Reduction in Seller Concessions




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