| It will soon cost more to buy a home in Puyallup, | | | | score will be required to have 10% minimum |
| Tacoma, and Pierce County using FHA financing | | | | investment in their home purchase. These changes will |
| because of four new policy changes announced by | | | | have very little effect for Puyallup, and Tacoma |
| HUD this morning. The changes include an increase of | | | | homebuyers because most reputable investor banks |
| the Up Front Mortgage Insurance Premium (UFMIP), a | | | | have already established a minimum credit score of |
| minimum credit score to qualify for 3.5% down | | | | 620 for FHA borrowing with 3.5% down. Officially, this |
| payment option, a decrease in allowable seller | | | | change is set to take effect in early summer. |
| concessions, and increased enforcement of FHA | | | | Another change that will affect my buyers applying for |
| lenders.It will soon cost more to buy a home in | | | | an FHA loan in Puyallup, Tacoma, or greater Pierce |
| Puyallup, Tacoma, and Pierce County using FHA | | | | County is the reduction of allowable seller concessions. |
| financing because of four new policy changes | | | | FHA loans have traditionally allowed the seller to pay |
| announced by HUD this morning. The changes include | | | | as much as 6% of the purchase price to cover a |
| an increase of the Up Front Mortgage Insurance | | | | buyer's closing costs. This amount could go towards |
| Premium (UFMIP), a minimum credit score to qualify for | | | | lender fees, prepaid taxes and insurance, as well as |
| 3.5% down payment option, a decrease in allowable | | | | helping to buy down the interest rate to lower the |
| seller concessions, and increased enforcement of FHA | | | | monthly payment. Again, most of my Puyallup, |
| lenders. | | | | Tacoma, and Pierce County buyers will not be |
| HUD's first step is to raise the UFMIP from 1.75% to | | | | affected because a 3% seller concession is good |
| 2.25%. The UFMIP is typically added to the loan | | | | enough to cover closings, and possibly have some left |
| amount so anyone buying a Puyallup Home for | | | | over to buy down interest rates with my company's |
| $200,000 will have a loan balance almost $1,000 higher | | | | closing costs. This change is being made to bring FHA |
| than under the previous guideline ($4,342 added to his | | | | lending more in line with Conventional loans that have |
| or her loan versus $3,377). A Tacoma Home buyer | | | | typically capped concessions at 3%. |
| purchasing for $250,000 will pay over $1,200 more | | | | Finally, HUD is taking steps to increase enforcement of |
| ($5,428 versus $4,221). HUD is also seeking | | | | all FHA lenders to help prevent predatory, and |
| government's permission to increase the total annual | | | | discriminatory lending practices. HUD will implement |
| Mortgage Insurance Premium (MIP), which would have | | | | measures to report lender performance rankings in a |
| the effect of increasing the total monthly payment for | | | | more user-friendly way. Hopefully, this will result in |
| my Pierce County Home buyers. These changes are | | | | lenders being more publicly accountable, and should not |
| being made in order to increase HUD's capital | | | | have any increased cost to HUD as the Neighborhood |
| reserves, and bring more private lenders back to | | | | Watch data is already publicly available. In the end, I |
| mortgage lending. These changes are expected to | | | | believe these changes will be positive for my Puyallup, |
| become effective this spring. | | | | Tacoma, and Pierce County Homebuyers, as it should |
| HUD is also instituting a minimum credit score of 580 | | | | allow FHA to continue to expand its mission of |
| for any borrower to qualify for a purchase with only | | | | providing affordable, responsible mortgage products, |
| 3.5% as down payment. Those with less than a 580 | | | | and support the housing market's recovery. |