More Changes For FHA Loans Coming?

In order to keep FHA out of the red and maintain ample reserves I expect additional credit policy changes to come from FHA soon. Changes such as--

* Minimum credit score of 620-660--Currently, FHA has no minimum credit score requirement; but most lenders require at least a 620 fico score and some a 660 score. I expect FHA will set a minimum credit score requirement soon in the range of 620 to 660.
* We also might see FHA make changes on loans with gift money for the down payment. Currently, a family member or employer can provide gift money to the borrower. Possibly FHA might require that any borrower invest a certain amount of money or percentage of money into their home purchase or I could see FHA requiring a higher credit score on these loans.
* We might see FHA require first time home buyers to attend a class on homeownership.
* Maybe FHA will lower their debt to income ratio requirements. Currently on a manual underwritten loan FHA requires that your house payment not exceed 31% of your gross monthly income (housing ratio) or your total minimum monthly debt payments, including your house payment, to not exceed 43% of your gross montly income (total debt ratio). Currently, on a FHA loan underwritten on-line using FHA's Total Scorecard Underwriting Software will often approve loans with a total debt ratio of 51%. I expect this ratio will lower which means less buying power for you.
* Finally, I could see FHA raise the costs of borrowing by increasing the upfront Mortgage Insurance Premium and/or the Monthly Mortgage Insurance Premium; thus raising your monthly housing payments.

To take advantage of the more lenient FHA standards of today you need to act TODAY! Get pre-approved for a FHA loan with a FHA Expert and find your new home and write a contract as the rules are based on the date we order a FHA Case Number, which we can't order until you are under contract to buy a home.