One of my trusted loan advisors in my cousin in Denver Colorado. He is a high producing member of Bank of America’s loan team. I received a letter from him this morning that highlights the changes to the FHA programs that have been so popular over the last 18 months. It is a reminder of the importance of working with a lender that is staying in-front of all these updates to loan programs. For any of your readers looking to purchase or for the loan advisors who are reading this as well, I hope you can benefit from the update that Casey and his team have provided. Have a great weekend.
Good Morning, FHA has been active in announcing changes over the last few months. While you may be aware of the majority of the changes I wanted to send an e-mail letting you know the changes that have been made or will be coming over the next year. With FHA being such a major part of today’s market I have been receiving a lot of questions on them as of late. If you have any questions don’t hesitate to contact me.
-February 1, 2010 – FHA lifts 90 day waiting period for property re-sale’s. This is a temporary waiver that will now give FHA borrowers access to a broader array of recently foreclosed properties. Arms length transactions only and if the sales price increases by 20% or more there will be additional documentation required to support the change.
-February 1, 2010 – FHA condo spot approvals are dead. This is good and bad. Over the long haul we should see more condos that are approved by FHA since there will be more lenders participating in the HRAP and DELRAP process. The bad news is that as the database is built up we will not be able to do any spot approvals to get the loan to closing quickly. If a condo is not already approved by the FHA expect that to add time to the loan process.
-HRAP (HUD Review and Approval Process)
-DELRAP (Direct Endorsement Lender Review and Approval Process)
-February 15, 2010 – Lenders must implement a process of appraiser independence similar to the conventional HVCC system.
-April 5, 2010 – FHA Up Front MIP increases from 1.75% to 2.25% of the loan amount. This won’t have a huge impact as typically the Up Front MIP is financed and not money the customer brings to closing. The downside is that it would reduce a small amount of equity the customer has in the property.
-April 30, 2010 – Tax credit expires for first time homebuyers and existing home owners who have been in their current home for 5 years and meet qualification. A contract must be signed by April 30th and close on or before June 30th. -Early to mid summer (Date TBD) – Reduction in seller concession from 6% to 3% on FHA loans. This could impact less expensive homes as a 3% sales commission may not be enough to pay all of the closing costs for a buyer who is tight on funds.
-December 7, 2010 – FHA condo projects removed from FHA approved list. All condo projects who received FHA approval before 10/1/08 will be removed from the approved list. That means all those condos approved before that time will now need to be re-approved through FHA. Going forward when a condo project is approved, it must be re-approved every 2 years.
-January 1, 2011 – FHA concentration on condo projects goes from a max of 50% to 30%. Currently, FHA allows up to 50% (higher in some cases) concentration. Starting 1/1/11 that maximum goes down to 50 to 30%. With the huge increase in FHA financing this could
-January 31, 2011 – FHA 90 day flipping rule back in effect.
If you have any questions on the changes do not hesitate to contact me on my cell at 720-252-5552.
Regards,
Casey
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